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Warner Music Group Corp Ordinary Shares - Class A WMG

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Warner Music Ends Fiscal 2021 With In Line Quarter; Newer Platforms Boosting Streaming Growth

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Warner Music posted an in line end to fiscal 2021, as live music began to return, lifting artist services revenue 71% on concert promotion and merchandising. We expect that vaccinations should help live music to return in more markets in the coming quarters, though the increasing spread of the delta variant may hinder that return. Even with live music bouncing back, streaming revenue continues to grow as WMG benefited from emerging platforms. We expect to increase our $33 fair value estimate to account for continued stronger-than-expected streaming growth even as consumers have ventured back out.

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Company Profile

Business Description

Warner Music Group is the third largest of the three major global record labels, with Vivendi’s Universal Music in first and Sony Music in second. Warner’s larger segment, recorded music, consists of iconic labels like Atlantic Records, Warner Records, and Parlophone Records and popular artists such as Ed Sheeran, Cardi B, Dua Lipa, and Blake Shelton. Warner Chappell, the firm’s publishing arm, is the home to over 65,000 composers and songwriters with over a million copyrights represented. Warner is controlled by Access Industries, which owns an 84% economic interest and 99% of voting rights.

Contact
1633 Broadway
New York, NY, 10019
T +1 212 275-2000
Sector Communication Services
Industry Entertainment
Most Recent Earnings Sep 30, 2021
Fiscal Year End Sep 30, 2022
Stock Type Aggressive Growth
Employees 5,900