Update shared on10 Sep 2025
Fair value Increased 1.31%Analysts have raised their price target for Warner Music Group, citing outperformance in subscription growth, anticipated benefits from wholesale music pricing increases, and operational efficiencies from reinvestment initiatives, resulting in a modest upward revision of the consensus target from $35.82 to $36.29.
Analyst Commentary
- Bullish analysts see record labels—including Warner Music—well positioned to benefit from anticipated increases in wholesale music pricing, presenting an attractive industry investment opportunity.
- Subscription growth outperformed expectations in the latest quarter, providing upside surprise and supporting sentiment around forward revenue momentum.
- Warner Music's reinvestment of cost savings into A&R, M&A, and technology is expected to drive operational efficiency and re-accelerate long-term growth, especially when coupled with upcoming wholesale pricing arrangements.
- Gross margin expansion is anticipated in fiscal 2026, supported by Warner's ongoing cost reduction initiatives and a rebound in recorded music subscription revenue.
- Potential upside from legal settlements and corporate actions remains a consideration, along with legacy media’s earnings surprises, although debate continues around overall valuation.
What's in the News
- Completed repurchase of 80,383 shares for $2.5 million under existing share buyback program.
- Declared regular quarterly cash dividend of $0.19 per share for Class A and Class B common stock.
- Formed a $1.2 billion joint venture with Bain Capital to acquire legendary music catalogs, with WMG managing marketing, distribution, and administration.
Valuation Changes
Summary of Valuation Changes for Warner Music Group
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $35.82 to $36.29.
- The Future P/E for Warner Music Group remained effectively unchanged, moving only marginally from 21.76x to 22.08x.
- The Discount Rate for Warner Music Group remained effectively unchanged, moving only marginally from 9.82% to 9.86%.
Disclaimer
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