Vivendi: Credit Suisse cuts target price

(CercleFinance.com) - Credit Suisse believes that although it is a little early to draw definitive conclusions and to make major changes to its forecasts, it has drafted two scenarios for UMG in 2020 which show potentials of fall of 21%-to-55% of EBITA (with -15% to -39% at the group level).


"This includes potential impacts of COVID-19 on physical, music publishing, digital downloads and merchandising, as well as streaming... This would suggest no significant long term impairment of UMG's value," the broker said.

These are mainly temporary phenomena, in our view, and we would expect music to resume good growth in 2021

Analysts have cut their target price for the share to 29.3 euros, against 30.1 euros, having slightly increased their EPS estimate in 2020/21 due to a slightly lower interest charge. Analysts are sticking to their outperform rating on the share.

"All available evidence suggests both Vivendi and Tencent are still committed to closing the sale of 10% of UMG in H1 20," it adds.



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