With Warner Bros. Discovery Stock Surging, Have You Considered The Downside?
Warner Bros. Discovery (WBD) stock is up 20.2% in 5 trading days. The rally reflects renewed optimism around its ongoing acquisition bidding war for streaming and studio assets, but big moves like this often invite a tougher question: is the stock truly resilient when markets reverse?
Before judging its downturn reslience, let’s look at where Warner Bros. Discovery stands today.
- Size: Warner Bros. Discovery is a $73 Bil company with $38 Bil in revenue currently trading at $29.49.
- Fundamentals: Last 12 month revenue growth of -4.3% and operating margin of 3.7%.
- Liquidity: Has Debt to Equity ratio of 0.69 and Cash to Assets ratio of 0.04
- Valuation: Warner Bros. Discovery stock is currently trading at P/E multiple of 99.8 and P/EBIT multiple of 13.1
- Has returned (median) 123% within a year following sharp dips since 2010. See WBD Dip Buy Analysis.
These metrics point to a Weak operational performance, alongside Low valuation – making the stock Risky. For details, see Buy or Sell WBD Stock
That brings us to the key consideration for investors chasing this rally: how resilient is WBD stock if markets turn south? This is where our downturn resilience framework comes in. Suppose WBD stock falls 20-30% to $21 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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2022 Inflation Shock
- WBD stock fell 88.5% from a high of $77.27 on 19 March 2021 to $8.87 on 28 December 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $29.53 on 10 December 2025 , and currently trades at $29.49
| WBD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -88.5% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- WBD stock fell 44.0% from a high of $32.77 on 16 January 2020 to $18.36 on 3 April 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 6 January 2021
| WBD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -44.0% | -33.9% |
| Time to Full Recovery | 278 days | 148 days |
2018 Correction
- WBD stock fell 45.0% from a high of $29.62 on 21 February 2017 to $16.28 on 14 November 2017 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 September 2018
| WBD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -45.0% | -19.8% |
| Time to Full Recovery | 302 days | 120 days |
2008 Global Financial Crisis
- WBD stock fell 64.9% from a high of $14.74 on 5 October 2007 to $5.18 on 24 October 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 16 September 2009
| WBD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -64.9% | -56.8% |
| Time to Full Recovery | 327 days | 1480 days |
Feeling jittery about WBD stock? Consider portfolio approach.
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Individual picks are volatile but diversified assets offset each other. A multi asset portfolio helps you stay the course capture upside and reduce downside.
The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices