Jefferies Upgrades Universal Music Group, Sees Robust Streaming GrowthJefferies Upgrades Universal Music Group, Sees Robust Streaming Growth NEW YORK, Thursday – Jefferies Financial Company has initiated coverage on Universal Music Group NV (UMG) with a Buy rating and an increased price target of €33.00, up from €31.00 previously. Jefferies analysts cite the strong growth potential of the music streaming industry, currently valued at $28.5 billion and projected to grow at a compound annual rate of over 11% in the next five years. UMG’s portfolio of artists, including Taylor Swift, the Weeknd, and Rihanna, positions it well for long-term success. UMG’s financial performance is also impressive, with an industry-leading return on invested capital (ROIC) of over 35% compared to Warner Music Group’s 20%. Its experienced management team, with 76 years of industry experience between the CEO and CFO, is another major strength. Jefferies’ price target is based on 19.5 times UMG’s fiscal 2025 EBITDA forecast, consistent with the company’s historical average. This revised metric reflects Jefferies’ confidence in UMG’s growth trajectory and market position. Investors should consider this increased price target as a positive indicator for UMG’s future growth and value in the music 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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