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Warner music shares rated as ‘buy’
By CMU Editorial | Published on Tuesday 19 May 2009
Elsewhere in investment news, US-based investment firm Pali Research has announced it is upgrading Warner Music, the only major record company to directly trade on a stock exchange, from a ‘neutral’ rating to a ‘buy’ rating.
The move shows partly an increased confidence in the wider music industry despite continued record sales declines, as well as some specific confidence in Warner where albums from the likes of Green Day, Wilco, Sean Paul, Missy Elliot and Goo Goo Doll, plus the expected Madonna hits package, are all expected to deliver.
Pali analyst Rich Greenfield reportedly wrote last week: “We have been quite negative on Warner Music and the broader music industry for the past few years, [but] Warner Music Group is in a position to generate over $400 million of [pre-tax earnings] and nearly $200 million of free cash flow in each of the next several years”.
