- Tigress Financial Partners analyst Ivan Feinseth reiterated a Buy rating on Warner Music Group Corp. WMG, maintaining the price target at $52.
- The analyst expects the company to be the only pure-play entity in the growth of streaming music, coupled with a robust 2023 release schedule.
- The analyst is particularly upbeat about the company's broad network to expand its content, which will continue to drive accelerating Business Performance trends.
- Warner Music will also likely gain from acquisitions and investments across the Middle East, North African music distributor Qanawat Music and leading independent African music distribution company Africori Ltd.
- The analyst applauds Warner Music's latest tie-ups with the world's most popular emerging and contemporary artists, including Ed Sheeran, Dua Lipa, Tatsuro Yamashita, GOT7, Jack Harlow, and Gunna, which is expected to create a "full music-driven immersive entertainment experience," driving future growth.
- Given the above trends, Tigress Financial expects the company's net sales revenue to grow by 6.42% to $6.17 billion in FY23. The company's revenues jumped 12% year-on-year to $5.92 billion in FY22.
- Economic Operating Cash Flow is expected to increase by 7.86% to $1.33 billion. Net Operating Profit After Tax will grow by 13.60% to $710.5 million.
- The company will also boost growth and shareholder value creation by strategically allocating its cash and cash flow through ongoing investments in new growth initiatives and strategic acquisitions.
- In August last year, Warner Music increased its quarterly dividend by 7% from $0.15 per share to $0.16 per share. The analyst expects a further dividend increase later this year as well.
- Price Action: WMG shares are trading higher by 2.15% at $32.34 on the last check Thursday.
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