Warner Music Group Corp.

Warner Music Group delivered a mixed result in the recent quarter with revenues above market expectations, but it failed to surpass the analyst consensus in terms of earnings. Due to this, the total revenue of Warner Music grew by 5%, and the adjusted EBITDA increased by 8%. The recorded music revenue increased by 3% and the streaming grew by 2%, reflecting the modest growth in the US and the ongoing weakness in the ad market. Music Publishing had quite an impressive quarter with 15% revenue growth. The strategy of Warner Chappel continues to deliver long-lasting relationships with a broad array of local as well as global talent while creating innovative opportunities for catalogs and expanding its services to songwriters. In the quarter, the highlights include the creative partnership of Warner Music with Belgian superstars which remains contributions of MAG as a co-producer of the recent album of Bad Bunny, and the collaboration of 21 Savage with Drake on Her Loss, the No.1 platform. We give Warner Music Group a ‘Hold’ rating with a revised target price.