Warner Music Group Corp.

DB:WA4 Stock Report

Market Cap: €15.8b

Warner Music Group Valuation

Is WA4 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of WA4 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: WA4 (€29.53) is trading below our estimate of fair value (€48.01)

Significantly Below Fair Value: WA4 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for WA4?

Key metric: As WA4 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for WA4. This is calculated by dividing WA4's market cap by their current earnings.
What is WA4's PE Ratio?
PE Ratio38.5x
EarningsUS$429.00m
Market CapUS$16.50b

Price to Earnings Ratio vs Peers

How does WA4's PE Ratio compare to its peers?

The above table shows the PE ratio for WA4 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average21x
EVD CTS Eventim KGaA
31.6x14.1%€7.9b
EDL Edel SE KGaA
7.9x9.7%€97.9m
G24 Scout24
35.3x14.8%€6.2b
RRTL RTL Group
9.3x-2.6%€3.7b
WA4 Warner Music Group
38.5x24.3%€16.5b

Price-To-Earnings vs Peers: WA4 is expensive based on its Price-To-Earnings Ratio (38.5x) compared to the peer average (21x).

Price to Earnings Ratio vs Industry

How does WA4's PE Ratio compare vs other companies in the European Entertainment Industry?

3 CompaniesPrice / EarningsEstimated GrowthMarket Cap
WA4 38.5xIndustry Avg. 13.9xNo. of Companies12PE01224364860+
3 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: WA4 is expensive based on its Price-To-Earnings Ratio (38.5x) compared to the European Entertainment industry average (13.9x).

Price to Earnings Ratio vs Fair Ratio

What is WA4's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

WA4 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio38.5x
Fair PE Ratio25.8x

Price-To-Earnings vs Fair Ratio: WA4 is expensive based on its Price-To-Earnings Ratio (38.5x) compared to the estimated Fair Price-To-Earnings Ratio (25.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst WA4 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€29.53
€34.12
+15.5%
15.1%€42.25€22.09n/a19
Nov ’25€29.12
€33.07
+13.6%
15.1%€40.41€21.13n/a19
Oct ’25€27.82
€32.69
+17.5%
14.4%€39.72€20.76n/a19
Sep ’25€25.68
€32.60
+26.9%
14.0%€40.09€20.96n/a18
Aug ’25€27.48
€34.96
+27.2%
12.6%€40.77€21.31n/a18
Jul ’25€28.25
€35.62
+26.1%
13.8%€42.04€19.62n/a16
Jun ’25€27.00
€36.35
+34.6%
15.2%€48.27€19.49n/a18
May ’25€30.43
€36.93
+21.4%
15.3%€48.85€19.73n/a18
Apr ’25€30.58
€35.86
+17.3%
15.5%€47.50€19.18n/a18
Mar ’25€32.12
€36.62
+14.0%
15.2%€48.26€19.49n/a19
Feb ’25€33.59
€34.46
+2.6%
18.0%€48.13€14.25n/a19
Jan ’25€31.90
€33.63
+5.4%
17.2%€47.63€14.11n/a19
Dec ’24€30.16
€33.63
+11.5%
17.1%€47.78€14.15n/a19
Nov ’24€29.30
€34.18
+16.7%
18.0%€49.12€14.55€29.1219
Oct ’24€29.28
€34.19
+16.8%
18.2%€49.50€14.66€27.8219
Sep ’24€30.52
€32.67
+7.0%
18.4%€47.82€14.16€25.6820
Aug ’24€28.40
€29.11
+2.5%
19.5%€47.01€13.92€27.4822
Jul ’24€24.09
€29.22
+21.3%
20.4%€47.85€12.88€28.2521
Jun ’24€23.14
€30.55
+32.0%
20.3%€48.29€13.00€27.0020
May ’24€27.31
€33.44
+22.5%
18.4%€47.40€12.76€30.4319
Apr ’24€29.97
€34.33
+14.6%
18.1%€47.87€12.89€30.5820
Mar ’24€29.51
€34.68
+17.5%
18.2%€48.41€13.03€32.1220
Feb ’24€33.19
€33.51
+1.0%
19.2%€47.94€12.91€33.5920
Jan ’24€32.84
€32.92
+0.2%
21.5%€48.97€10.36€31.9020
Dec ’23€32.52
€32.36
-0.5%
22.6%€49.95€10.57€30.1619
Nov ’23€26.09
€31.83
+22.0%
25.6%€52.67€11.14€29.3019

Analyst Forecast: Target price is less than 20% higher than the current share price.

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