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Investing.com - Goldman Sachs raised its price target on Warner Music Group (NASDAQ:WMG) to $31.00 from $28.00 while maintaining a Neutral rating following the company’s fiscal third-quarter 2025 results. According to InvestingPro data, WMG has shown strong momentum with an 8.5% return over the past week, while trading at a current price of $31.71.
The investment bank cited better-than-expected subscription and ad-supported streaming growth as a key factor in its decision to increase the price target. Goldman Sachs also noted Warner Music Group’s updated outlook on drivers of multi-year streaming revenue growth and improved visibility into margin expansion and free cash flow conversion targets. The company’s strong performance is reflected in its healthy 46.6% gross profit margin and $607 million in levered free cash flow over the last twelve months.
Goldman Sachs has revised its outlook for Warner Music Group’s fiscal year 2025 and beyond, increasing revenue projections by approximately 1%, adjusted OIBDA (Operating Income Before Depreciation and Amortization) by 6-10%, and free cash flow by 8-10%.
The firm attributed these upward revisions to better-than-expected streaming market share momentum and new cost efficiency initiatives outlined by Warner Music Group’s management.
Despite the price target increase, Goldman Sachs maintained its Neutral rating on Warner Music Group shares, noting the new target implies 0% potential return with a 2.4% dividend yield over a 12-month period. InvestingPro analysis reveals that WMG has consistently raised its dividend for 5 consecutive years, with additional insights available in the comprehensive Pro Research Report, which offers deep-dive analysis of WMG and 1,400+ other US stocks.
In other recent news, Warner Music Group reported its third-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.03, which was significantly below the forecasted $0.29. Despite this 89.66% miss in EPS, the company exceeded revenue expectations, reporting $1.69 billion against a forecast of $1.59 billion, a 6.29% surprise. Additionally, Bernstein SocGen raised its price target for Warner Music Group to $35 from $34, maintaining an Outperform rating. The firm highlighted Warner Music Group’s sustained profitability and market share gains, anticipating digital monetization growth in 2026. These developments reflect a complex financial picture for Warner Music Group, with mixed signals from earnings and analyst assessments.
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