Warner Music Group (WMG) is expected to finish fiscal 2026 with continued subscription growth and margin expansion, while recently signed deals and AI platforms may support fiscal 2027, UBS Securities said Wednesday in a report.

UBS expects higher wholesale rates, subscriber growth and cost savings to drive fiscal Q4 revenue growth of 10% and about 170 basis points of margin expansion.

For fiscal 2027, UBS expects recently signed deals to build through the year, with native AI platforms also contributing.

UBS forecasts fiscal Q4 revenue of $1.24 billion and operating income before depreciation and amortization of $442 million. For the full year, it expects revenue of $4.8 billion and margins of 23.7%, above the high end of the company's targeted 150-200 basis points of expansion.

Q4 results are expected in mid-November.

UBS raised its price target on Warner Music stock to $43 from $42 and maintained its buy rating.

Price: 27.65, Change: +0.04, Percent Change: +0.14