Added to YB: 2024-04-19
Pitch date: 2024-04-16
UMG.AS [bullish]
Universal Music Group N.V.
-26.07%
current return
Author Info
NTH Capital is a buyside analyst in London who shares equity research ideas. Sign up for the newsletter.
Company Info
Universal Music Group N.V. operates as a music company worldwide. The company operates through Recorded Music, Music Publishing, and Merchandising & Other segments.
Market Cap
EUR 34.8B
Pitch Price
EUR 25.37
Price Target
72.74 (+288%)
Dividend
2.74%
EV/EBITDA
16.37
P/E
22.89
EV/Sales
3.02
Sector
Entertainment
Category
growth
UMG Investment Thesis
UMG.AS: Global music leader with 32% market share. Recurring, high-margin royalty revenues to grow at +8% CAGR driven by pricing, streaming penetration & digital economy opps. EBITDA margins to expand from 21% to 30% on operating leverage, digital mix & catalogue shift. AI an opportunity, not a threat. Key risks: DSP disintermediation (unlikely), AI threat (UMG has leverage), artist direct-to-consumer (labels needed for success), high content spend (skewed to superstars, secures long-term rights). 28% 4yr IRR potential on re-rating to NFLX premium valuation.
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