- Morgan Stanley analyst Benjamin Swinburne maintained Warner Music Group Corp WMG with an Overweight and raised the price target from $31 to $38.
- As the headwinds that weighed on FY22 begin to fade in Q1, Swinburne sees shares set up to outperform.
- WMG reported fourth-quarter FY22 revenue growth of 8.8% year-on-year to $1.497 billion, beating the consensus of $1.42 billion.
- Recorded Music revenue grew 6% Y/Y to $1.24 billion. Music Publishing increased 24% Y/Y to $254 million, and Digital grew 7% Y/Y to $989 billion.
- GAAP EPS was $0.28 versus $0.05 the prior year.
- Beyond fading headwinds, he notes that WMG should benefit from price increases by its distributors and emerging streaming contract renewals.
- Ben raised his estimates and his price target.
- Price Action: WMG shares closed higher by 1.27% at $32.60 on Friday.
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