Universal Music Group Receives Upgraded Rating and Price Target from JefferiesUniversal Music Group Receives Upgraded Rating and Price Target from Jefferies Jefferies Financial Company has upgraded its rating on Universal Music Group NV (UMG) to Buy and raised its price target to €33.00, signaling optimism for the music company’s prospects. According to Jefferies, the music streaming industry is poised for significant growth, with a compound annual growth rate of over 11% projected for the next five years. UMG’s strong portfolio of renowned artists, such as Taylor Swift and Rihanna, positions the company well to capitalize on this market expansion. Highlighting UMG’s financial performance, Jefferies notes the company’s impressive return on invested capital (ROIC) of over 35%, significantly higher than the industry average. Additionally, the company’s experienced management team with extensive music industry knowledge is viewed as a key strength. Jefferies’ updated price target of €33.00 is based on a multiple of 19.5 times UMG’s fiscal 2025 EBITDA forecast, which aligns with the company’s historical valuation range. This upgraded rating and price target from Jefferies provide investors and market observers with an updated perspective on UMG’s value. The report reflects UMG’s strong competitive position, growth potential, and financial performance, making it an attractive investment opportunity for those seeking exposure to the growing music streaming industry.
On Thursday, Jefferies Financial Company initiated coverage on Universal Music Group NV (AS::NA) (OTC: UMGNF) shares, assigning a Buy rating with an increased price target to €33.00, up from €31.00 previously. The firm’s outlook for the music company is optimistic, citing the robust growth potential of the music streaming industry.
The music streaming market, valued at around $28.5 billion, is expected to grow at a compound annual growth rate of more than 11% over the next five years. Jefferies believes Universal Music Group’s strong portfolio of artists, including names like Taylor Swift, the Weeknd and Rihanna, positions the company favorably for long-term success.
Universal Music Group’s financial performance is highlighted by its industry-leading return on invested capital (ROIC), which stands at over 35%, compared to Warner Music Group’s approximately 20%. Universal’s experienced management team, with a combined 76 years of music industry experience between the CEO and CFO, is also seen as a major strength.
Jefferies’ price target is based on 19.5 times Universal Music Group’s fiscal 2025 EBITDA forecast. This valuation is consistent with the company’s historical average, supporting the rationale behind the price target increase.
Investors and market watchers now have a revised metric to consider when evaluating Universal Music Group’s stock. This metric reflects the company’s confidence in its growth trajectory and market position.
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