Warner Music Group: Accelerating Streaming Growth, Emerging AI Monetization, and Undervalued Upside Support Buy Rating

Analyst Cameron Mansson-Perrone from Morgan Stanley maintained a Buy rating on Warner Music Group and keeping the price target at $37.00.

Cameron Mansson-Perrone has given his Buy rating due to a combination of factors that point to accelerating growth and attractive valuation for Warner Music Group. He highlights that the company is executing on a clear strategy to increase market share, enhance the monetization of its music catalog, and improve operational efficiency, with recent earnings confirming progress on all three fronts. Streaming revenue growth has re-accelerated, particularly in subscriptions, and, when combined with disciplined cost control, has translated into robust double-digit underlying profit expansion, demonstrating the earnings power of the model. Mansson-Perrone also underscores that these results were achieved before the impact of newly negotiated digital service provider agreements, which are expected to further boost both revenue and earnings in coming quarters.
Cameron Mansson-Perrone’s rating is based on the view that Warner Music Group is well positioned to benefit from multiple pricing and volume drivers, including retail and wholesale price increases as well as incremental revenue from new AI-related platforms. The company has already secured partnerships with several emerging AI music services and expects these to make a meaningful financial contribution by fiscal 2027, adding an additional growth layer on top of core streaming. Against this improving fundamental backdrop, he notes that the stock has lagged despite upward earnings revisions, creating what he sees as an attractive risk/reward opportunity. His $37 price target implies notable upside from current levels and anticipates modest valuation multiple expansion as investors recognize the durability and acceleration of Warner Music Group’s revenue and earnings trajectory.

In another report released today, TD Cowen also reiterated a Buy rating on the stock with a $46.00 price target.