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Warner Music Group Corp. (NASDAQ:WMG) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with US$1.5b revenue coming in 2.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.07 missed the mark badly, arriving some 74% below what was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
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Following last week's earnings report, Warner Music Group's 17 analysts are forecasting 2025 revenues to be US$6.40b, approximately in line with the last 12 months. Per-share earnings are expected to surge 31% to US$1.12. Before this earnings report, the analysts had been forecasting revenues of US$6.49b and earnings per share (EPS) of US$1.33 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
Check out our latest analysis for Warner Music Group
It might be a surprise to learn that the consensus price target was broadly unchanged at US$33.73, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Warner Music Group, with the most bullish analyst valuing it at US$38.00 and the most bearish at US$28.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Warner Music Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.1% growth on an annualised basis. This is compared to a historical growth rate of 7.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Warner Music Group.