Vivendi: UBS upgrades to buy; target price of 23 euros.
(CercleFinance.com) - This morning UBS upgraded its rating on Vivendi shares from neutral to buy, while raising its target price by 28%, from 18 euros to 23 euros.
Analysts mention "a structural growth story," boosted by the group's streaming branch, Universal Music Group (UMG), and the ongoing turnaround of Canal+.
UBS' report is entitled, "Thank you for the music," which first looks at the UMG division of Vivendi (about half of its turnover), which is now in great shape. How much is UMG worth? Perhaps not 20 billion euros, according to an estimate that is circulating, but rather 17 billion euros, UBS calculates, while Vivendi's overall market capitalisation amounts to some 27 billion euros on the Paris Stock Exchange. UBS recalls that while the penetration rate of music streaming is currently only 1%, in Sweden, the most advanced market, it reaches 22%. This indeed bodes well for UMG's future growth.
What about Canal+; is it still struggling, or is it now on the road to recovery? UBS estimates that the losses of Vivendi's pay-TV clients "are about to slow down", which will lead to a recovery in its accounts. This is especially the case, as the new formulae, and in particular their pricing, meet client demands, in the opinion of analysts. UBS hence estimates that Canal+ is worth around five billion euros.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Analysts mention "a structural growth story," boosted by the group's streaming branch, Universal Music Group (UMG), and the ongoing turnaround of Canal+.
UBS' report is entitled, "Thank you for the music," which first looks at the UMG division of Vivendi (about half of its turnover), which is now in great shape. How much is UMG worth? Perhaps not 20 billion euros, according to an estimate that is circulating, but rather 17 billion euros, UBS calculates, while Vivendi's overall market capitalisation amounts to some 27 billion euros on the Paris Stock Exchange. UBS recalls that while the penetration rate of music streaming is currently only 1%, in Sweden, the most advanced market, it reaches 22%. This indeed bodes well for UMG's future growth.
What about Canal+; is it still struggling, or is it now on the road to recovery? UBS estimates that the losses of Vivendi's pay-TV clients "are about to slow down", which will lead to a recovery in its accounts. This is especially the case, as the new formulae, and in particular their pricing, meet client demands, in the opinion of analysts. UBS hence estimates that Canal+ is worth around five billion euros.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.