Wells Fargo analyst Omar Mejias maintained a Hold rating on Warner Music Group (WMG – Research Report) yesterday and set a price target of $30.00.
Omar Mejias has given his Hold rating due to a combination of factors impacting Warner Music Group’s financial outlook. The company has revised its subscription growth expectations downward, particularly in China, which has led to a reduction in their anticipated subscription revenue and AOIBDA margins. This adjustment reflects a challenging market share environment and has resulted in a lowered price target from $34 to $30.
Additionally, Warner Music Group’s recent financial results showed weaker-than-expected subscription and advertising growth, which were influenced by tough comparisons from the previous year and a soft advertising environment. Despite some positive growth in the U.S. subscription streaming volume, international markets are under pressure, contributing to a cautious outlook. The company plans to increase M&A activity to strengthen its international market share, but the current financial projections and market conditions justify a Hold rating at this time.
According to TipRanks, Mejias is a 3-star analyst with an average return of 12.1% and an 86.67% success rate. Mejias covers the Communication Services sector, focusing on stocks such as Cinemark Holdings, IMAX, and Warner Music Group.
In another report released on April 21, Morgan Stanley also downgraded the stock to a Hold with a $32.00 price target.