Bernstein SocGen Group lifted its price target on Warner Music Group (NASDAQ:WMG) to $34 from $32 while maintaining an Outperform rating, anticipating in-line Q3 results but emphasizing the importance of new details that could shape expectations for fiscal 2026 earnings growth.
The analysts expect Warner’s upcoming Q3 report in early August to largely meet both its own and consensus estimates, but highlighted a potential earnings wildcard tied to cash proceeds from a recent legal settlement with Frontier, which could provide an unexpected boost to adjusted OIBDA and net income.
Looking beyond the quarter, Bernstein’s focus is on incremental disclosures that will clarify Warner’s growth trajectory for 2026, including: the timing of minimum per-subscriber escalators in new licensing deals with major streaming platforms like Spotify and Amazon Music; the pace of cost reductions, which this time should drop to the bottom line instead of being reinvested in artist development; and the timeline for deploying the $1.2 billion earmarked for catalog acquisitions through its joint venture with Bain Capital.
The analysts see these updates as critical to solidifying the bullish case for Warner shares, underpinned by expanding margins and strategic investments that could accelerate earnings growth into fiscal 2026.
