WMG Should I Buy
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Warner Music Group Corp (WMG) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company shows positive revenue growth and hedge funds are increasing their positions, the technical indicators are bearish, and the stock has limited short-term upside potential. Additionally, declining net income and EPS, along with mixed analyst sentiment, suggest waiting for a better entry point.
The stock is showing bearish technical indicators. The MACD is below zero and negatively contracting, RSI is neutral at 46.855, and moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). Key support is at 27.114, and resistance is at 30.762. The stock is trading near resistance levels, which limits immediate upside potential.
Hedge funds are significantly increasing their positions, with a 127.41% increase in buying over the last quarter.
The company reported a 7% revenue increase in Q1 2026, driven by a 9% growth in recorded music subscription streaming.
Analysts see potential for pricing growth in the music streaming market.
Net income dropped by 24.46% YoY, and EPS fell to 0, down 100% YoY.
Gross margin decreased slightly to 40.98%.
Analysts have lowered price targets recently, with some maintaining neutral ratings.
Technical indicators suggest a bearish trend, with limited short-term upside.
In Q1 2026, Warner Music reported a 10.44% YoY revenue increase to $1.84 billion, driven by a 9% growth in recorded music subscription streaming. However, net income dropped by 24.46% YoY to $176 million, and EPS fell to 0. Gross margin also declined slightly to 40.98%.
Analysts are mixed on WMG. Recent ratings include a Buy rating from MoffettNathanson with a $38 price target, while Citi lowered its price target to $40 from $41 but maintained a Buy rating. Wolfe Research and Jefferies also lowered price targets but kept positive ratings. Goldman Sachs and BofA maintain Neutral ratings with modest price target adjustments.
