Why Discovery Stock Is Soaring Today
It took a day and a nudge from Bank of America to get the ball rolling, but the ball is rolling in a big way now. BofA upgraded cable television content maker Discovery (NASDAQ: DISC.A) (NASDAQ: DISCK), (NASDAQ: DISC.B) to a buy today following encouraging comments made by AT&T (NYSE: T) CEO John Stankey late Wednesday regarding the impending merger of Discovery and AT&T's WarnerMedia arm. All share classes of the cable television content maker are trading sharply higher, though its widely owned Class A shares are leading the way with a gain of 16.4% as of 12:43 p.m. ET Friday.
Bank of America's upgrade may have been the prompt. Given the sheer scope of Friday's rally and BofA's relatively tempered explanation, though, beaten-down Discovery shares appeared primed for a rally long before today. As of Thursday's close the stock was down 67% from March's peak, with no significant advances being made during that stretch. Today's gain carries Discovery shares to a six-month high.
And yet, Bank of America analyst Jessica Reif Ehrlich is only voicing the (mostly) obvious in pointing out that AT&T's WarnerMedia -- which includes HBO -- and Discovery are "highly complementary assets."
Source Fool.com
