Warner Music Group: Pricing Power Is Proven, Catalog Returns Are Not

Warner Music Group is rated a buy, but with measured position sizing due to uncertainties in catalog returns and debt levels. WMG benefits from higher streaming subscription rates, favorable industry fundamentals, and restructuring savings, supporting above-industry revenue and potential margin expansion. Shares trade below historical forward multiples, offering potential upside if subscription growth and margin expansion targets are met and free cash flow after acquisitions improves.