Want to see NL:UMG full AI Analyst Report?
Top Page
Universal Music Group
(UMG)
Select Model
Select Model
Rating:65Neutral
Price Target:
€18.50
▲(26.37% Upside)
Action:Reiterated
Date:08/01/26
The score is driven primarily by solid financial performance (durable revenue growth and improved leverage) but is held back by a weak technical setup (price far below major moving averages) and near-term earnings-call concerns around margin pressure and materially weaker first-half free cash flow. Valuation is supportive with a reasonable P/E and a ~3.6% dividend yield.
Positive Factors
Resilient Revenue Growth
Sustained revenue expansion over several years indicates resilient demand for UMG’s recorded music, publishing, and related rights. Continued top-line growth broadens the monetization base, supports investment in artists and catalogs, and provides a durable foundation for future earnings.
Negative Factors
Margin Compression
Falling gross and net margins show that revenue growth has not translated proportionally into profitability. If cost, mix, or operating pressures persist, lower margins could limit earnings growth, reduce reinvestment flexibility, and make future results more dependent on continued volume expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Resilient Revenue Growth
Sustained revenue expansion over several years indicates resilient demand for UMG’s recorded music, publishing, and related rights. Continued top-line growth broadens the monetization base, supports investment in artists and catalogs, and provides a durable foundation for future earnings.
Read all positive factors
Universal Music Group (UMG) vs. iShares MSCI Netherlands ETF (EWN)
Market Cap
€31.41B
Dividend Yield3.04%
Average Volume (3M)2.88M
Price to Earnings (P/E)97.6
Beta (1Y)1.20
Revenue Growth5.18%
EPS Growth-87.61%
CountryNL
Employees9,636
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)0.18
Shares Outstanding1,838,527,000
10 Day Avg. Volume2,598,629
30 Day Avg. Volume2,884,469
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
€23.93Price Target Upside63.45% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)1
Revenue Forecast (FY)€13.38B
Universal Music Group Business Overview & Revenue Model
Company Description
Universal Music Group N.V. stands as a leading global music entertainment corporation, organized into three primary business divisions: Recorded Music, Music Publishing, and Merchandising & Other. The Recorded Music division is dedicated to discov...
How the Company Makes Money
UMG makes money by monetizing music and related rights and services across several major revenue streams:
1) Recorded music revenue (largest driver)
- Streaming: UMG earns the majority of recorded-music revenue from licensing its catalog and new ...
Universal Music Group Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 04, 2027
Earnings Call Sentiment Neutral
The call reported solid top-line growth, meaningful strategic progress (Streaming 2.0 deals, AI and market initiatives, completed buyback and dividend), and continued strong catalogue/artist performance. Offsetting this are tangible near-term profitability and cash-flow headwinds—margin contraction ex-Downtown, merchandising losses, higher operating and financing costs, and a sharp drop in H1 free cash flow. Management emphasized long-term strategy, disciplined capital allocation, and expectational improvements from integrations and pricing actions, but near-term execution and cash-flow normalization remain priorities.Positive Updates
Strong Top-Line Growth
Q2 total revenue grew 13.3% YoY to €3.3 billion (6.4% growth excluding the Downtown acquisition). First half revenue growth was 10.8% (5.7% ex-Downtown).
Negative Updates
Margin Pressure
Excluding Downtown, adjusted EBITDA margin declined by 1.3 percentage points to 21.5% in Q2. Recorded music adjusted EBITDA margin fell 1.8 ppt to 24.9%; music publishing margin down ~20 bps to 22.6%—driven by revenue/repertoire mix, lower-margin audiovisual/live growth and absence of a prior-year settlement uplift.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Top-Line Growth
Q2 total revenue grew 13.3% YoY to €3.3 billion (6.4% growth excluding the Downtown acquisition). First half revenue growth was 10.8% (5.7% ex-Downtown).
Read all positive updates
Company Guidance
The call reiterated multi-year financial discipline and a few explicit targets and near‑term expectations: Q2 revenue was €3.3bn (+13.3% y/y; +6.4% excl. Downtown) and adjusted EBITDA €674m (+1.5%; flat excl. Downtown), H1 revenue +10.8% (+5.7% excl. Downtown) with adjusted EBITDA +2.7% (+1.6% excl. Downtown), adjusted diluted EPS +4.3% to €0.47, and a free cash flow conversion target of 60–70% (now measured versus the newly defined free cash flow); H1 free cash flow was €24m (versus €163m in H1 2025 under the new definition) with management expecting stronger FCF in H2. Segment and cash metrics called out include recorded music revenue up ~16% (recorded excl. Downtown +8.7%), subscription revenue +16.6% (+6.7% excl. Downtown) with Streaming 2.0 pricing contributing ~3.5pp and a ~1.5pp market‑share headwind, physical +16%, music publishing +9.8% (+2.7% excl. Downtown) with publishing margin ~22.6% (–20bps), merchandising revenue down ~11% and an EBITDA loss of €5m, net royalty advances €292m (vs €377m), CapEx €44m (vs €23m), and completed share buybacks (€485m of first €500m program plus €250m from the second authorization), an interim dividend of €432m, and €403m gross proceeds from partial Spotify stake sales. They also reiterated capital‑allocation hurdles (advances portfolio target pre‑tax IRR ≥15% with project hurdles 10–20%; catalog IRR ≥10%; M&A 10–20%; other M&A 10–25%+), noted catalog entry multiples ~16.6x EBITDA (improving to ~13x run‑rate), Chord/UMG investments (Chord >$2.6bn invested; UMG €342m invested), and guidance that music publishing should be mid‑single‑digit growth near term while merchandising should improve in 2027 and Downtown’s ~5% Q2 margin can be enhanced through integration.Universal Music Group Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.82B | 12.51B | 11.83B | 11.11B | 10.34B | 8.50B |
| Gross Profit | 4.86B | 4.87B | 5.09B | 4.90B | 4.59B | 3.90B |
| EBITDA | 2.53B | 2.59B | 3.47B | 1.83B | 1.35B | 1.49B |
| Net Income | 323.00M | 1.53B | 2.09B | 1.26B | 782.00M | 886.00M |
Balance Sheet | ||||||
| Total Assets | 18.38B | 17.46B | 17.86B | 13.09B | 11.64B | 12.09B |
| Cash, Cash Equivalents and Short-Term Investments | 485.00M | 82.00M | 580.00M | 504.00M | 439.00M | 585.00M |
| Total Debt | 5.56B | 3.41B | 3.19B | 2.51B | 2.67B | 3.10B |
| Total Liabilities | 14.73B | 12.89B | 13.31B | 10.11B | 9.29B | 10.06B |
| Stockholders Equity | 3.63B | 4.54B | 4.53B | 2.96B | 2.35B | 2.03B |
Cash Flow | ||||||
| Free Cash Flow | 1.49B | 1.61B | 1.31B | 1.59B | 1.64B | 1.08B |
| Operating Cash Flow | 1.58B | 1.68B | 1.75B | 1.89B | 1.73B | 1.14B |
| Investing Cash Flow | -965.00M | -874.00M | -1.05B | -622.00M | -520.00M | -391.00M |
| Financing Cash Flow | -598.00M | -907.00M | -552.00M | -1.28B | -1.35B | -1.34B |
Universal Music Group Technical Analysis
Positive
14.64
Price Trends
14.79
Positive
15.96
Positive
17.23
Negative
Market Momentum
0.47
Negative
69.38
Neutral
29.74
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 14.64 is below the 20-day moving average (MA) of 15.56, below the 50-day MA of 14.79, and below the 200-day MA of 17.23, indicating a neutral trend. The MACD of 0.47 indicates Negative momentum. The RSI at 69.38 is Neutral, neither overbought nor oversold. The STOCH value of 29.74 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
UnderperformOutperform
Sector (60)
NL:UMG
Universal Music Group
17.09
-4.60
-21.23%
NL:BNJ
Banijay Group N.V. Class A
7.86
-0.97
-10.96%
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.