MUMBAI: The stock of Warner Music, US fell 12 per cent in early trading on the NYSE on Monday following Goldman Sachs analysts’ downgrading the company’s stock to a “sell” rating from “neutral,” says a Reuters report.
With artistes like Maddona, Red Chilli Pepper, R.E.M and more on its roster, the company stands as the third largest in the world.
According to Goldman Sachs analyst Ingrid Chung, her team does not see any near-to-intermediate term improvement in prospects for the music industry with US album sales down 11 per cent in both the first quarter and second quarter.It will also be increasingly difficult for Warner to manage costs as revenue continues to decline, points out the report.
“We believe that Warner Music Group will find it increasingly difficult to improve its U.S. market share after six straight quarters of doing so,” said Chung in a note to clients.
Warner will post its fiscal third quarter earnings on Thursday.
Shares in Warner fell 71 cents to $7.55 on the New York Stock Exchange, after falling as low as $7.24 earlier in the session.