The re-embrace of YouTube and Warner Music Group drew cautiously optimistic feedback from Goldman Sachs on Tuesday.  In an investor note shared with Digital Music News, analyst Ingrid Chung pointed to a number of upsides on the deal, including hefty advertising percentages for Warner.

Chung, vice president of Internet and Entertainment Equity Research at Goldman, also praised a provision to create special Warner channels.  “WMG will launch enhanced music channels embedded within YouTube, built around various artists… allowing Warner Music Group to control customization and page layout,” Chung stated.  “We view this deal as positive for Warner Music Group given greater control over the distribution of its content, the potentially more favorable advertising split with YouTube, and the opportunity to benefit more greatly from ecommerce.”

But unlike Citigroup or Pali Research, Chung stopped short of an aggressive rating or valuation.  The analyst kept the stock at a ‘neutral’, and pegged the 6-month target at $5.50.  “We remain cautious on the near-to-intermediate term fundamentals for the music industry,” Chung shared.

Elsewhere, the street also liked the deal.  At the bell on Tuesday, shares of WMG bumped 8.91 percent to $5.62.