The Zurich headquarters of UBS, which has settled on a neutral rating for Universal Music Group stock. Photo Credit: JaierRT
UBS has officially downgraded its Universal Music Group stock rating from buy to neutral – albeit while reiterating a per-share target of €30 (currently $35).
The Zurich-headquartered bank just recently disclosed its updated Universal Music Group stock (UMG on the Euronext Amsterdam) forecast. As summed up by multiple financial publications, UBS believes the major label has continued room for revenue growth.
Of course, that refers in part to anticipated paid streaming gains. Despite ongoing concerns of subscription plateaus across established markets, UMG posted a 9.5% YoY hike for streaming revenue during Q1 2025, including an 11.5% YoY spike from premium listening.
(There’s presumably a forthcoming upside from more expensive on-demand tiers as well as superfan offerings, but time will tell when they actually go live. On the other hand, ensuring strong free-to-paid conversions might be a comparative challenge in light of the subscription plateau.)
Separately, however, the expansion-minded major is also rolling out high-profile label JVs and looking to break “into every dimension of entertainment and consumer life,” to name a couple examples.
But the way UBS views things, these and adjacent growth areas are already baked (or at least baking) into Universal Music’s stock price. At present, UMG shares are resting at €26.58 ($30.99) a pop – up approximately 10.5% from 2025’s start and closer to 27% from a July 2024 low.
UBS’ rating is accompanied by the mentioned €30 target price for Universal Music Group stock, implying a nearly 13% boost from here. And given the emphasis on sustained positive trends, it’ll be interesting to see the major’s Q2 performance particulars.
More immediately, UBS’ adjusted UMG outlook has entered the media spotlight about three months after Pershing Square trimmed its Universal Music holding. (Perhaps not coincidentally, the offering was priced at €26.60 per share.) Then, Bill Ackman, the CEO of Pershing Square Capital Management, stepped down from the label’s board last month.
Though the announcement roughly lined up with Ackman’s appointment as executive chairman of Howard Hughes Holdings’ own board, it also followed a 2024 push to have Universal Music exit the Euronext Amsterdam in favor of a stateside listing.
Long story short, Universal Music brass opposed the move, but Pershing still has the option (one it seemingly intends to exercise in 2025) to debut a secondary UMG listing in the States.
Closing on a different stock-related note, Pershing Square Holdings (LON: PSH) today announced a $200 million share buyback program. “Since PSH commenced its first share buyback program on 2 May 2017,” the company wrote, “PSH has repurchased 69,920,511 PSH Public Shares for a total of $1.6 billion at an average price of $22.49.”
Content shared from www.digitalmusicnews.com.