- Morgan Stanley is out with bullish previews of this week's earnings in the audio sector.
- Along with its take on Libery SiriusXM and Sirius XM, the firm is reiterating Overweight ratings for Warner Music Group and Spotify.
- Warner Music (WMG +1.2%) reports after the close today, and Morgan Stanley is expecting growth to be driven by accelerated streaming growth and reopening tailwinds (in live and traditional formats).
- The firm has a $40 price target, implying 13% upside.
- Consensus expectations are for EPS of $0.20 on revenues of $1.26B.
- As for Spotify (SPOT +5.6%), it reports before the open on Wednesday; Morgan Stanley says the company's in good position to maintain its leadership among streaming music players. But after a strong 2020 (shares are up 122.5% over the past year), it says the company will need to keep delivering faster user growth and improvement in average revenue per user to justify the bull-case pricing.
- It has a $350 price target there, implying another 5% upside from today's gains.
- Consensus on SPOT earnings is for EPS of -$0.60 on revenues of $2.6B.