Universal Music Group (NL:UMG)
:UMG
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Universal Music Group
(UMG)
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Rating:65Neutral
Price Target:
€22.00
▲(6.74% Upside)
Action:Downgraded
Date:04/02/26
The score is driven primarily by solid financial performance (durable revenue growth, improved leverage, and positive cash generation) and a constructive earnings-call outlook (growth, cost savings, and strategic initiatives). These positives are tempered by weak technical signals (below key moving averages with negative MACD) and a relatively high P/E that is only partly offset by the ~3% dividend yield.
Positive Factors
Recurring streaming momentum
Sustained near‑10% growth in on‑demand streams points to durable, recurring consumption of UMG’s catalog. That consumption underpins long‑term royalty flows and predictable streaming revenue, supporting stable top‑line and licensing income across cycles.
Negative Factors
Margin compression and profit volatility
Structural margin erosion and year‑to‑year profit swings reduce free cash flow scalability and increase sensitivity to cost pressures or weaker releases. Lower and more volatile margins make long‑term cash generation less predictable and amplify downside in economic stress.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring streaming momentum
Sustained near‑10% growth in on‑demand streams points to durable, recurring consumption of UMG’s catalog. That consumption underpins long‑term royalty flows and predictable streaming revenue, supporting stable top‑line and licensing income across cycles.
Read all positive factors
Universal Music Group (UMG) vs. iShares MSCI Netherlands ETF (EWN)
Market Cap
€37.58B
Dividend Yield2.37%
Average Volume (3M)2.08M
Price to Earnings (P/E)26.6
Beta (1Y)1.12
Revenue Growth5.69%
EPS Growth-26.66%
CountryNL
Employees9,636
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)0.84
Shares Outstanding1,838,527,800
10 Day Avg. Volume2,438,056
30 Day Avg. Volume2,081,948
Financial Highlights & Ratios
PEG Ratio-1.01
Price to Book (P/B)8.97
Price to Sales (P/S)3.26
P/FCF Ratio25.34
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€26.01Price Target Upside26.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)1.03
Revenue Forecast (FY)€13.62B
Universal Music Group Business Overview & Revenue Model
Company Description
Universal Music Group N.V. operates as a music company worldwide. It operates through Recorded Music, Music Publishing, and Merchandising & Other segments. The Recorded Music segment discovers and develops recording artists, as well as markets and...
How the Company Makes Money
UMG primarily makes money by monetizing music and related rights across multiple channels. (1) Recorded music: UMG earns revenue from the distribution and licensing of sound recordings. A major portion comes from streaming platforms (e.g., subscri...
Universal Music Group Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive operational and financial picture: solid revenue and adjusted EBITDA growth (~8–9%), strong Recorded Music and Publishing performance, healthy subscription and streaming momentum, resilient cash generation, progress on cost savings, and a clear strategic push into AI, superfan products and independent label services (Downtown/Virgin). Notable challenges include a decline in reported net profit driven by lower investment valuation gains, significant merchandising margin pressure (adjusted EBITDA down 61%), elevated advances and cash timing variability, FX headwinds for 2026, and comparability noise from legal settlements. Management emphasized disciplined reinvestment, M&A (Downtown), and multiple AI/superfan partnerships while maintaining leverage (~0.9x) and dividend continuity. Overall, positive operating momentum and strategic initiatives outweigh the headwinds and one-off items.Positive Updates
Top-line and EBITDA Growth
Full-year 2025 revenue grew 8.7% in constant currency and adjusted EBITDA grew 8.6%, delivering an adjusted EBITDA margin of 22.5% (in line with prior year).
Negative Updates
Net Profit Decline (IFRS) Due to Investment Valuations
Reported net profit fell to EUR 1.53 billion in 2025 from EUR 2.09 billion in 2024, driven by a much smaller valuation uplift in listed investments (EUR 283 million in 2025 vs EUR 1.2 billion in 2024). Reported EPS declined to EUR 0.84 from EUR 1.14.
Read all updates
Q4-2025 Updates
Positive
Negative
Top-line and EBITDA Growth
Full-year 2025 revenue grew 8.7% in constant currency and adjusted EBITDA grew 8.6%, delivering an adjusted EBITDA margin of 22.5% (in line with prior year).
Read all positive updates
Company Guidance
UMG reiterated a confident outlook built on strong 2025 results (revenue +8.7% CC; adjusted EBITDA +8.6%; adjusted EBITDA margin 22.5%) and midterm targets (Streaming 2.0-driven organic growth framework and an 8–10% CAGR target for 2023–2028), while flagging a 4–5% FX headwind to 2026 revenue; management expects subscription revenue to benefit from recent Streaming 2.0 deals and price increases (subscription revenue +8.6% for 2025; Q4 subscription +7.7% / +9.6% excl. catch‑up), and reiterated financial guidance points including adjusted diluted EPS €1.03 (up from €0.96), adjusted net profit €1.91bn (+7%), a proposed full‑year dividend €0.52/share (€0.28 final), net cash from ops before tax €2.14bn, free cash flow €702m (55% conversion of adjusted EBITDA), leverage 0.9x and a €1bn bridge facility to fund strategic investment; cost‑savings are on track for the €250m program (€90m realized in 2025; €40–50m expected in 2026; remaining €35–45m to benefit 2027); 2026 investing levels will include higher CapEx (€100–200m increase) and continued catalog/M&A activity (2025 investments €854m, catalogs €280m, CapEx/intangibles €195m), including the Downtown add (2025 unaudited revenue €891m, EBITDA €40m, ~17x 2025 EBITDA pre‑synergy, ~13x post).Universal Music Group Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 12.51B | 11.83B | 11.11B | 10.34B | 8.50B |
| Gross Profit | 4.87B | 5.09B | 4.90B | 4.59B | 3.90B |
| EBITDA | 2.54B | 3.47B | 1.83B | 1.35B | 1.49B |
| Net Income | 1.53B | 2.09B | 1.26B | 782.00M | 886.00M |
Balance Sheet | |||||
| Total Assets | 17.46B | 17.86B | 13.09B | 11.64B | 12.09B |
| Cash, Cash Equivalents and Short-Term Investments | 82.00M | 580.00M | 504.00M | 439.00M | 585.00M |
| Total Debt | 3.41B | 3.19B | 2.51B | 2.67B | 3.10B |
| Total Liabilities | 12.89B | 13.31B | 10.11B | 9.29B | 10.06B |
| Stockholders Equity | 4.54B | 4.53B | 2.96B | 2.35B | 2.03B |
Cash Flow | |||||
| Free Cash Flow | 1.61B | 1.31B | 1.59B | 1.64B | 1.08B |
| Operating Cash Flow | 1.68B | 1.75B | 1.89B | 1.73B | 1.14B |
| Investing Cash Flow | -874.00M | -1.05B | -622.00M | -520.00M | -391.00M |
| Financing Cash Flow | -907.00M | -552.00M | -1.28B | -1.35B | -1.34B |
Universal Music Group Technical Analysis
Positive
20.61
Price Trends
18.45
Positive
19.22
Positive
21.07
Negative
Market Momentum
0.47
Negative
61.64
Neutral
59.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NL:UMG, the sentiment is Positive. The current price of 20.61 is above the 20-day moving average (MA) of 19.45, above the 50-day MA of 18.45, and below the 200-day MA of 21.07, indicating a neutral trend. The MACD of 0.47 indicates Negative momentum. The RSI at 61.64 is Neutral, neither overbought nor oversold. The STOCH value of 59.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NL:UMG.
Universal Music Group Peers Comparison
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Sector (60)
NL:UMG
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20.44
-7.26
-26.21%
NL:BNJ
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8.78
-1.32
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.