Publication date: June 14, 2024
While the acronym UMG may not ring a bell for everyone, the mention of Universal Music Group is sure to strike a chord with countless music enthusiasts. This AEX main fund has been listed in Amsterdam since September 2021 and is performing excellently. It's time to delve deeper into UMG and explore what we can expect from this powerhouse in the music industry.
UMG is the largest music group in the world. Nine out of 10 artists recorded worldwide are under contract with this company. This long list includes the mega-popular Taylor Swift, Drake, The Weeknd, and Lady GaGa, and old acquaintances such as U2, Sting, and Neil Diamond. Well-known Dutch artists such as Anouk, BLOF, Kensington, and Andre Rieu are also all included in UMG. The long list of artists generated revenues of €11.1 billion in 2023 and brings UMG a market share of about 35% of the global music industry.
Price development: analysis and trends
After the introduction, fast forward to the stock prices. How is the company performing on the stock market and what can we expect?"
Below is the chart of UMG since the start of its listing in Amsterdam in September 2021. The orange graph shows the movement of the AEX over the same period. Immediately noticeable is that UMG is generally in line with the AEX, except for the first half of 2023. UMG's share price fell, because of the 2022 annual results.
From September 2021 to June 13, 2024, UMG is up over 14% and the AEX is up over 18%.
This does not seem very special for the time being but if we look at the course of the last twelve months we can see that UMG manages to perform very well and is coming back strongly from a lesser period in early 2023.
With a stunning 40% increase, UMG has outperformed the AEX (as indicated in orange) by a significant margin, showcasing remarkable resilience in the market.
Based on pattern recognition, the algorithm gives the most likely scenario that UMG is in a strong uptrend with a price target of € 33. The current price target is €29. Keep in mind that before reaching the €33 price target, there may be a brief correction around the €27 mark.
According to our technical analysis, there is potential for UMG to be a valuable addition to your portfolio, especially if there is a decline around the €27 mark.
The fundamental analysts are also positive. UMG is followed by a large group of analysts from well-known banks and 80% are positive. That means a Strong Buy according to the banks with price targets between €33 and even €37.
Conclusion:
UMG is a strong-performing company with growing sales and is a world leader in the music industry.
Technically the trend is up and fundamentally the banks are positive.
The price of UMG has risen sharply and, based on technical analysis, may go through a correction of about 5-7%. This creates a buying opportunity around €27 with a target price of €33.
Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.
