Warner Music Group (WMG) is expected to post fiscal Q3 results showing continued strength in subscription revenue, supported by higher wholesale rates and solid subscriber growth, UBS Securities said.

The investment firm said in a Monday note that those trends should drive accelerating revenue growth in fiscal 2026, while recently signed agreements with AI platforms could provide additional upside to growth in fiscal 2027.

UBS also said ongoing cost-saving initiatives are expected to improve margins, while management's efforts to optimize catalog monetization through AI and targeted marketing could generate additional higher-margin revenue.

The brokerage expects Warner Music Group to deliver double-digit subscription revenue growth and about 250 basis points of margin expansion in fiscal 2026 and said it is largely maintaining its estimates, including fiscal Q3 revenue of about $1.81 billion.

UBS has a buy rating and a $42 price target.

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