Warner Music Group slips as Guggenheim cuts on streaming … - Seeking Alpha
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Warner Music Group slips as Guggenheim cuts on streaming … - Seeking Alpha

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Warner Music Group (NASDAQ:WMG) shares fell more than 2% in premarket trading on Friday as investment firm Guggenheim downgraded the music company, citing worries over weaker streaming revenues.
Analyst Michael Morris lowered his rating on
“Importantly, we also take a modestly more conservative view of a sustained growth trajectory in streaming revenue and recorded music margin expansion,” Morris wrote in a note to clients.
As such, he now expects ad-supported streaming revenue to fall 12% year-over-year, compared to a prior estimate of a 5% decline, while subscription revenues are expected to rise 9% year-over-year, down from a prior outlook of 13% growth.
Morris also lowered estimates for first-quarter physical revenue to $130M, down from $175M and Artist Services and expanded rights to $200M, down from $219M.
“We remain confident in the company’s ability to continue to source, develop, and monetize unique intellectual property,” Morris added.
“However, we also see greater than previously forecast volatility on quarterly trends and a more conservative multi-year Recorded Music streaming revenue growth to low double digits from our prior low teens as incrementally pressuring our valuation,” he continued.
Last month, Bank of America said Warner Music Group (WMG) was one of the top 10 most overweight stocks in U.S. long-only funds.
Analysts are largely bullish on Warner Music Group (WMG). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates WMG a HOLD.



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