Warner Music Group (WMG) is expected to continue low single-digit growth in the second half of fiscal 2025 and will see accelerating revenue in fiscal 2026, supported by new wholesale deals and cost-saving initiatives, UBS Securities said in an earnings preview emailed Thursday.

The firm said it expects Warner's fiscal Q3 revenue to total $1.58 billion, up 2% from a year earlier, while operating income before depreciation and amortization is forecast to grow 5% to $339 million.

Recorded Music revenue in fiscal Q3 is expected to be flat with less than 1% growth in streaming due to tough comparisons and past pricing effects, while a rebound is anticipated in Q4 because of recent market share gains, UBS said.

The brokerage said music publishing revenue will likely grow 5% during the quarter, with streaming up 6%, and a recent renewal with Spotify (SPOT) could drive further upside later.

Warner is targeting $265 million in annual cost savings by fiscal year 2027, with most benefits flowing to margins, according to the note.

UBS has a buy rating on the company's stock with a $38 price target.

Price: 30.25, Change: +0.26, Percent Change: +0.85