WMG - BUY - Subscription Catalyst Path Remains Attractive; Refining FX Assumptions

Research evidence excerpt

WMG - BUY - Subscription Catalyst Path Remains Attractive; Refining FX Assumptions

July 7, 2026

Michael Morris, CFA michael.morris@guggenheimpartners.com WMG - BUY - Subscription Catalyst Path Remains

804 253 8025 Attractive; Refining FX Assumptions

Grayson Glenn

grayson.glenn@guggenheimpartners.com

804 253 8053 Key Message: We remain BUY rated on Warner Music shares with a $36 price target,

supported by core subscription revenue strength and our expectation for incremental Charles Wilber

charles.wilber@guggenheimpartners.com DSP renewal benefits and AI product agreements. Our F3Q core Recorded Music

804 335 3977 subscription revenue growth forecast is unchanged at 12.5%, reflecting resilient global

market share trends and the ongoing benefit from PSM increases, which should further Taylor Manley contribute in the coming quarter. Looking beyond F3Q, we see multiple positive catalysts taylor.manley@guggenheimpartners.com

804 253 1336 ahead. We expect announcement of an Apple renewal in the coming months, which

would complete agreements with all five of WMG's largest distribution partners and

provide incremental wholesale pricing benefits. We also see a pathway to a new

agreement with Spotify inclusive of terms for an AI super premium product, similar to the

WMG BUY announcedin fiscal 2027Spotify-UMGand beyond.partnership,Additionally,whichAI platformwe believelicensingwould providerevenueadditionalfrom the revenueexisting

Warner Music Group Corp. Suno partnership represents an attractive fiscal 2027 revenue opportunity as the platform

Sector: Media & Internet generated $300mm in annualized revenue on 2mm paying subscribers at the latest

disclosure in February. Our modestly lower F3Q revenue and Adjusted OIBDA forecast