Warner Music Group Corp "F3Q Preview; Executing on cost savings" (Buy) Levi

研报英文原文证据摘录

Warner Music Group Corp "F3Q Preview; Executing on cost savings" (Buy) Levi

Global Research

20 July 2026ab

Warner Music Group Corp Equities

AmericasF3Q Preview; Executing on cost savings

Entertainment

12-month rating Buy

Ongoing cost savings with AI opportunity in the horizon

We expect F3Q results to reflect continued strength in subscription revenue, supported 12m price target US$42.00

by higher wholesale rates and solid subscriber growth. These trends should drive

accelerating revenue growth in F26E, while the recently signed deals with AI platforms

Price (20 Jul 2026) US$28.36

should provide upside to growth in F27E. We expect execution against cost saving

initiatives to drive better margins while mgmt's focus on optimizing catalog RIC: WMG.N BBG: WMG US

monetization through AI and targeted marketing help generate incremental higher

Trading data and key metrics

margin revenue growth.

52-wk range US$34.70-23.66

Subscription revenue growth accelerating to double-digits Market cap. US$14.9b

Shares o/s 525m (COM)

We expect WMG is on track to deliver double-digit subscription revenue growth

Free float 90%

and 250 bps y/y margin expansion in F26. We are largely maintaining our

estimates, including revenues of $1.81B in F3Q, up 6.2% y/y FXN, and OIBDA of Avg. daily volume ('000) 40.9

$416M, or +11.6% y/y FXN, representing 23.0% margins, up ~90 bps y/y. For the Avg. daily value (m) US$1.2

full year, we expect revenues of ~$7.3B, up 6.8% y/y FXN, while margins expand Common s/h equity (09/26E) US$0.88b

~250 bps to 24.0%. P/BV (09/26E) 16.9x

Net debt to EBITDA (09/26E) 2.6x

We expect total recorded music revenues of $1.45B in F3Q, +6.7% y/y FXN core.

This includes 12% y/y growth in core subscription rev (supported by rate hikes) EPS (UBS, diluted) (USD)