Warner Music Group (NASDAQ:WMG) Shares Gap Up – Should You Buy?

Warner Music Group Corp. (NASDAQ:WMG) gapped up before the market opened on Monday . The stock had previously closed at $25.96, but opened at $27.27. Warner Music Group shares last traded at $26.1570, with a volume of 565,826 shares trading hands.

Warner Music Group News Roundup

Here are the key news stories impacting Warner Music Group this week:

• Positive Sentiment: Preliminary results beat expectations. Warner Music Group said fiscal third-quarter results exceeded analyst expectations, providing a favorable signal ahead of the company’s full earnings release. Warner Music Group preliminary results beat expectations
• Positive Sentiment: Streaming growth remained strong. Fiscal Q3 revenue increased approximately 10%, supported by double-digit growth in streaming. Recorded-music subscription streaming revenue rose 11% year over year during calendar Q2, suggesting the core recurring-revenue business remains healthy. Warner Music Group Q3 revenue growth Warner Music Group subscription revenue growth and CFO filing
• Positive Sentiment: Analyst sentiment is moderately favorable. Warner Music Group received an average “Moderate Buy” rating, which may provide some support if the company confirms its preliminary performance. Warner Music Group analyst rating
• Neutral Sentiment: Official results are due earlier than previously scheduled. WMG will release fiscal third-quarter results on August 5, followed by a conference call at 4:30 p.m. ET. The report and management’s outlook could determine whether the preliminary beat translates into sustained investor confidence. Warner Music Group earnings conference call
• Negative Sentiment: CFO Armin Zerza is departing after roughly one year. Lou Dickler was appointed acting CFO, while Tom Corson was promoted to chief operating officer. Although the filing indicates the change was not prompted by a weak quarter, the abrupt finance transition may raise concerns about execution, reporting continuity and leadership stability. Warner Music Group CFO departure Tom Corson named COO

Wall Street Analysts Forecast Growth

Several brokerages have recently commented on WMG. Sanford C. Bernstein reiterated an “outperform” rating on shares of Warner Music Group in a research report on Friday, May 8th. UBS Group raised their price objective on Warner Music Group from $40.00 to $42.00 and gave the stock a “buy” rating in a research note on Friday, May 8th. JPMorgan Chase & Co. lifted their price objective on shares of Warner Music Group from $40.00 to $43.00 and gave the stock an “overweight” rating in a report on Friday, May 8th. Guggenheim increased their target price on shares of Warner Music Group from $34.00 to $36.00 and gave the stock a “buy” rating in a report on Friday, May 8th. Finally, Wall Street Zen downgraded shares of Warner Music Group from a “buy” rating to a “hold” rating in a research report on Saturday, July 18th. Fourteen investment analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $38.43.

Warner Music Group Trading Down 1.3%

The firm has a market capitalization of $13.37 billion, a P/E ratio of 30.17, a PEG ratio of 0.38 and a beta of 1.30. The business’s 50 day moving average is $28.76 and its two-hundred day moving average is $28.86. The company has a quick ratio of 0.71, a current ratio of 0.73 and a debt-to-equity ratio of 5.62.

Warner Music Group (NASDAQ:WMG) last issued its quarterly earnings results on Thursday, May 7th. The company reported $0.44 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.30 by $0.14. Warner Music Group had a return on equity of 62.01% and a net margin of 6.34%.The firm had revenue of $1.73 billion during the quarter, compared to analyst estimates of $1.61 billion. During the same period last year, the company posted $0.07 EPS. The firm’s quarterly revenue was up 16.7% on a year-over-year basis. Analysts expect that Warner Music Group Corp. will post 1.52 EPS for the current year.

Warner Music Group Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Tuesday, June 2nd. Shareholders of record on Tuesday, May 26th were issued a $0.19 dividend. This represents a $0.76 dividend on an annualized basis and a yield of 3.0%. The ex-dividend date of this dividend was Tuesday, May 26th. Warner Music Group’s dividend payout ratio is presently 89.41%.

Hedge Funds Weigh In On Warner Music Group

Several hedge funds have recently made changes to their positions in WMG. Handelsbanken Fonder AB lifted its stake in Warner Music Group by 87.1% during the second quarter. Handelsbanken Fonder AB now owns 42,200 shares of the company’s stock valued at $1,142,000 after purchasing an additional 19,642 shares during the last quarter. Chesley Taft & Associates LLC acquired a new position in Warner Music Group in the second quarter worth approximately $286,000. Assenagon Asset Management S.A. acquired a new stake in shares of Warner Music Group during the 2nd quarter valued at $7,217,000. Central Pacific Bank Trust Division acquired a new stake in shares of Warner Music Group during the 2nd quarter valued at $107,000. Finally, Bank of America Corp DE boosted its stake in shares of Warner Music Group by 42.2% during the 1st quarter. Bank of America Corp DE now owns 574,242 shares of the company’s stock worth $14,666,000 after acquiring an additional 170,316 shares in the last quarter. Institutional investors and hedge funds own 96.88% of the company’s stock.

Warner Music Group Company Profile

Warner Music Group is a major global music company that operates across recorded music and music publishing. Its recorded-music business comprises a portfolio of well-known labels—including Atlantic, Warner Records and Parlophone—as well as distribution and artist-services operations that support both established and emerging artists. The company’s publishing arm, Warner Chappell Music, manages songwriting catalogs and administers rights for compositions across multiple media, providing licensing for film, television, advertising and other commercial uses.

WMG’s activities span the full music value chain: signing and developing artists, producing and marketing recordings, distributing music through physical channels and streaming platforms, and monetizing rights through licensing, synchronization and neighboring-rights collection.