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Warner Music Group Stock Rises 5.3% as Company Scraps Believe Acquisition

Warner Music Group - ★★ - Ranked #85 in our Q2 SMID Equity Rankings

$36.00 price target

On Monday, shares of Warner Music Group (Nasdaq: WMG) jumped 5.3%, closing at $35.10, after the company announced it would not be proceeding with a planned acquisition of the French digital music company Believe.

Warner Music had previously been in talks to acquire Believe for around €1.65 billion ($1.75 billion USD). However, the company said in a statement on Saturday that it has decided not to finalize a bid for Believe after reviewing the opportunity.

The decision to forgo the Believe acquisition appears to have been well-received by investors, with Warner Music's stock closing the day above its 50-day moving average of $34.69.

However, Warner Music's stock has underperformed the broader market so far this year, with the company down 1.9% year-to-date compared to a 9.5% gain for the S&P 500.

Warner Music Group is one of the world's largest recorded music companies, home to popular artists such as Ed Sheeran, Cardi B, and Bruno Mars. The company has been actively expanding its business through strategic acquisitions in recent years as it looks to capitalize on the ongoing growth of streaming music.

We currently have a ★★ (negative short term outlook) on WMG with a price target of $36.00 over the next twelve months.

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