In a report released today, Stephen Laszczyk from Goldman Sachs maintained a Buy rating on Warner Music Group (WMG – Research Report), with a price target of $38.00.
Stephen Laszczyk recommends a Buy rating for Warner Music Group’s stock based on a robust growth trajectory and expected margin expansion. The forecast for the company’s Adjusted Constant Currency Recorded Music Streaming Revenue shows a significant increase, expected to rise from 8.9% in the previous quarter to 12.4%. The projection also includes a substantial improvement in Adjusted OIBDA Margins, which are predicted to expand from 20.0% to 25.9%, although this is partly attributed to a one-time high-margin licensing revenue. Furthermore, Warner Music Group is anticipated to demonstrate strong free cash flow generation, with approximately $210 million expected for the quarter.
Additionally, Laszczyk sees Warner Music Group as a dominant player in the global music entertainment industry, poised to capitalize on multiple secular growth trends. The company’s strategic positioning should allow it to enhance Adjusted EBITDA margins, better its free cash flow conversion, and make accretive capital allocations. These factors lead to the belief that the stock price has the potential to rise further as the company continues to execute its growth strategies. The analysis maintains the outlook for FY1Q24 Revenue and Adjusted OIBDA, which are projected to show year-over-year increases of 12.7% and 29.4%, respectively.
Laszczyk covers the Communication Services sector, focusing on stocks such as Warner Music Group, Cinemark Holdings, and IMAX. According to TipRanks, Laszczyk has an average return of 5.1% and a 68.97% success rate on recommended stocks.
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Warner Music Group (WMG) Company Description:
With about $3.5 billion in revenue, Warner Music Group is one of the largest music companies in the world. More than 80% of Warner’s revenue comes from recorded music, while the remainder is generated from music publishing.
Read More on WMG:
- The media stocks to own in 2024, according to Wells Fargo
- Warner Music price target raised to $40 from $38 at Morgan Stanley
- Warner Music price target raised to $36 from $34 at Loop Capital
- Warner Music price target raised to $35 from $33 at Barclays
- Warner Music Group Corp. Reports Results for Fiscal Fourth Quarter and Full Year Ended September 30, 2023
