Results: Universal Music Group N.V. Exceeded Expectations And The Consensus Has Updated Its Estimates

Last week saw the newest annual earnings release from Universal Music Group N.V. (AMS:UMG), an important milestone in the company's journey to build a stronger business. Revenues were €12b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at €1.13, an impressive 33% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Universal Music Group after the latest results.

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After the latest results, the 14 analysts covering Universal Music Group are now predicting revenues of €12.5b in 2025. If met, this would reflect an okay 6.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to nosedive 27% to €0.83 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €12.5b and earnings per share (EPS) of €0.83 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

See our latest analysis for Universal Music Group

The analysts reconfirmed their price target of €29.58, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Universal Music Group, with the most bullish analyst valuing it at €42.00 and the most bearish at €15.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Universal Music Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.0% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this to the 187 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.9% per year. Factoring in the forecast slowdown in growth, it looks like Universal Music Group is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Universal Music Group going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Universal Music Group has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.