Analyst David Karnovsky of J.P. Morgan maintained a Buy rating on Warner Music Group, with a price target of $33.00.
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David Karnovsky has given his Buy rating due to a combination of factors that suggest potential growth and value for Warner Music Group. One of the key reasons is the joint venture with Bain Capital, which is expected to enhance Warner’s music investment capabilities. This partnership is projected to contribute significantly to Warner’s revenue and AOIBDA over the next few years, with the potential for further expansion beyond the initial $1.2 billion scope. The collaboration also aligns with Warner’s strategic goal of increasing its investment in music catalogs, which is anticipated to yield stable returns.
Additionally, Warner Music Group’s restructuring plan aims to achieve substantial cost savings by the end of fiscal year 2027, which should positively impact its financial performance. The company is also well-positioned to benefit from the global growth in paid music streaming, with expectations of high-single-digit AOIBDA growth driven by streaming revenue. Furthermore, Warner’s current trading valuation appears attractive compared to its peers, and the firm’s strategic initiatives and market positioning support the raised price target, reinforcing the Buy recommendation.
According to TipRanks, Karnovsky is a 5-star analyst with an average return of 14.1% and a 73.68% success rate. Karnovsky covers the Communication Services sector, focusing on stocks such as Cinemark Holdings, AMC Networks, and Paramount Global Class B.
In another report released on July 3, Bernstein also reiterated a Buy rating on the stock with a $34.00 price target.