Warner Music Group (WMG) PT Lowered to $32 at JPMorgan

JPMorgan analyst Alexia S. Quadrani lowered the price target on Warner Music Group (NASDAQ: WMG) to $32.00 (from $38.00) while maintaining a Overweight rating.

The analyst comments "WMG shares are -7% (vs. SPX +5% and UMG +1%) since reporting F2Q results on May 8. The underperformance mainly reflects lower consensus estimates after an F2Q miss and management pulling their RM subscription streaming guidance for the year citing company specific factors including China market share loss and a lighter release slate. We think some of the recent headlines regarding label negotiations with music AI firms may have also weighed on sentiment. While we understand investor frustration regarding the quarter and prior prints, we do think there’s reason for optimism and a better set up from here. On a forward basis, shares now trade close to trough levels at ~12x AOIBDA and relative to 1- and 2-year averages at 13.1x and 13.7x. WMG has seemingly de-risked the outlook for the year after providing expectations for similar RM trends in F3Q/F4Q and noting A&R growth in excess of F24’s pace. For 2026, we see a better story for the labels, which have made clear in our view an expectation for wholesale pricing increases, while superfan tiers offer incremental upside. Looking longer-term, WMG maintains a strong growth formula driven by higher penetration of music streaming globally, significant room for pricing gains with now greater alignment across labels and DSPs, and a scalable model. We have reduced our estimates following earnings and our PT moves to $32, but we remain Overweight. Universal Music (UMG NA) is covered by JPM Analyst Daniel Kerven."

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