Warner Music Group: FQ3 Preview; Latest Thoughts on AI, Market Share

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Warner Music Group: FQ3 Preview; Latest Thoughts on AI, Market Share

J P M O R G A N North America Equity Research

17 July 2026

Warner Music Group Overweight

WMG, WMG US

FQ3 Preview; Latest Thoughts on AI, Market Share Price (16 Jul 26):$28.55

Price Target (Dec-26):$43.00

We’re refreshing our thoughts and estimates for Warner Music Group ahead of FQ3 Media, Entertainment and

results, reflecting recent trends and conference commentary. WMG shares are - Advertising

14% (vs. SPX +1%, UMG -7%) since reporting earnings in early May; we attribute David Karnovsky, CFA AC

the underperformance largely to concerns around potential market share losses in (1-212) 622-1206

the quarter, and relatedly a strong recent UMG slate. The absence of an agreement david.karnovsky@jpmorgan.com

with Spotify to license content for an AI tier is another drag, though we see this as Kiscada A Hastings

a matter of when and not if, and a near-term catalyst. For the quarter, our overall (1-212) 622-0226

revenue and OIBDA estimates are unchanged, though we moderate RM organic kiscada.hastings@jpmchase.com

subscription streaming growth to 13% on timing of wholesale price increases. Our Alexey Philippov, CFA

(1-212) 622-0810

forecast is slightly above consensus, and continues to assume decelerated but alexey.philippov@jpmorgan.com

upward market share contribution y/y, as well as a small incremental pricing

Douglas Wardlaw

benefit q/q; our model also captures the ~2.5% tougher comp relative to the prior (1-212) 622 4885

quarter (15.4% growth in FQ2). douglas.wardlaw@jpmchase.com

J.P. Morgan Securities LLC

Price Tracker: 3 of 5 major DSPs have announced price increases YTD, and

we expect more before the end of FQ4. Spotify and Amazon Music announced