Communications
Pricing power - this 38-page in-depth report highlights the industry’s favourable characteristics (capital light, low competition and consumer staple like nature) and WMG’s compounder qualities (highly predictable FCF, consistent margins and returns). After 10 years of streaming platforms & labels keeping subscription prices low to attract new subscribers, the time is now ripe for increasing prices. Abacus analysts believe an EV/EBITDA of 16x 2024 is appropriate for a one year forward fair value. They estimate 2024 EBITDA of $1.5bn, giving a M/Cap of $21bn or $42 share price (55% upside).
Edition: 148
- 11 November, 2022