BofA Securities slashes price target on Warner Music Group Corp. [WMG] – find out why.



Warner Music Group Corp. [NASDAQ: WMG] gained 2.46% on the last trading session, reaching $42.96 price per share at the time. The company report on November 17, 2021 that WMG Acquisition Corp. Announces Launch of Senior Secured Notes Offering.

Warner Music Group Corp. (“Warner Music Group” or “WMG”) announced that through its wholly owned subsidiary WMG Acquisition Corp. it has commenced a private offering (the “Offering”) of $535 million aggregate principal amount of senior secured notes (the “Notes”).

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The Company intends to use the net proceeds of the Offering to fund a portion of the aggregate cash consideration for potential acquisitions by the Company of certain music and music-related assets, or if any of such potential acquisitions are not completed, for general corporate purposes. The Company may also use the net proceeds of the Offering to redeem all or a portion of the Notes (so long as, in the case of a partial redemption, at least $250 million of the Notes remain outstanding following such redemption) at any time on one or more occasions on or prior to the fifth business day following December 20, 2021 by giving notice at least five business days prior to such time at the special optional redemption price equal to the issue price of the Notes plus 1% of the principal amount thereof together with accrued and unpaid interest on such Notes from the date of issuance to but excluding the redemption date.

Warner Music Group Corp. represents 514.35 million in outstanding shares, while the company has a total market value of $22.23 billion with the latest information. WMG stock price has been found in the range of $41.49 to $43.065.

If compared to the average trading volume of 989.15K shares, WMG reached a trading volume of 838386 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about Warner Music Group Corp. [WMG]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for WMG shares is $46.62 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on WMG stock is a recommendation set at 2.40. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

BofA Securities have made an estimate for Warner Music Group Corp. shares, keeping their opinion on the stock as Underperform, with their previous recommendation back on November 16, 2021. While these analysts kept the previous recommendation, Evercore ISI raised their target price to Outperform. The new note on the price target was released on October 21, 2021, representing the official price target for Warner Music Group Corp. stock. Previously, the target price had yet another raise from $38 to $48, while Barclays kept a Overweight rating on WMG stock. On September 21, 2021, analysts increased their price target for WMG shares from 37 to 48.

The Average True Range (ATR) for Warner Music Group Corp. is set at 1.47, with the Price to Sales ratio for WMG stock in the period of the last 12 months amounting to 4.71. The Price to Book ratio for the last quarter was 268.50, with the Price to Cash per share for the same quarter was set at 0.85. Price to Free Cash Flow for WMG in the course of the last twelve months was 74.60 with Quick ratio for the last quarter at 0.60.

Trading performance analysis for WMG stock

Warner Music Group Corp. [WMG] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -4.02. With this latest performance, WMG shares dropped by -9.88% in over the last four-week period, additionally plugging by 17.73% over the last 6 months – not to mention a rise of 46.87% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for WMG stock in for the last two-week period is set at 36.04, with the RSI for the last a single of trading hit 32.27, and the three-weeks RSI is set at 40.97 for Warner Music Group Corp. [WMG]. The present Moving Average for the last 50 days of trading for this stock 45.73, while it was recorded at 42.92 for the last single week of trading, and 38.47 for the last 200 days.

Warner Music Group Corp. [WMG]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and Warner Music Group Corp. [WMG] shares currently have an operating margin of -5.13 and a Gross Margin at +41.88. Warner Music Group Corp.’s Net Margin is presently recorded at -10.64.

Return on Total Capital for WMG is now -7.51, given the latest momentum, and Return on Invested Capital for the company is -15.77. Additionally, WMG Total Debt to Total Capital is recorded at 101.86, with Total Debt to Total Assets ending up at 53.70.

Reflecting on the efficiency of the workforce at the company, Warner Music Group Corp. [WMG] managed to generate an average of -$86,364 per employee. Receivables Turnover for the company is 5.77 with a Total Asset Turnover recorded at a value of 0.72.Warner Music Group Corp.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.60 and a Current Ratio set at 0.60.

Warner Music Group Corp. [WMG]: An earnings per share (EPS) analysis

With the latest financial reports released by the company, Warner Music Group Corp. posted 0/share EPS, while the average EPS was predicted by analysts to be reported at 0.06/share. When compared, the two values demonstrate that the company fail the estimates by a Surprise Factor of -100.00%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for WMG. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Warner Music Group Corp. go to 33.17%.

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An analysis of insider ownership at Warner Music Group Corp. [WMG]

There are presently around $4,071 million, or 81.60% of WMG stock, in the hands of institutional investors. The top three institutional holders of WMG stocks are: SANDS CAPITAL MANAGEMENT, LLC with ownership of 13,473,812, which is approximately -0.66% of the company’s market cap and around 2.20% of the total institutional ownership; VANGUARD GROUP INC, holding 8,145,315 shares of the stock with an approximate value of $349.92 million in WMG stocks shares; and FMR LLC, currently with $311.17 million in WMG stock with ownership of nearly 13.969% of the company’s market capitalization.

Positions in Warner Music Group Corp. stocks held by institutional investors increased at the end of November and at the time of the November reporting period, where 106 institutional holders increased their position in Warner Music Group Corp. [NASDAQ:WMG] by around 16,737,622 shares. Additionally, 61 investors decreased positions by around 8,827,062 shares, while 21 investors held positions by with 69,206,087 shares. The mentioned changes placed institutional holdings at 94,770,771 shares, according to the latest SEC report filing. WMG stock had 42 new institutional investments in for a total of 7,322,237 shares, while 22 institutional investors sold positions of 4,507,309 shares during the same period.



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