Barclays upgrades Universal Music on cost-cutting, AI upside

By Reuters News

** Barclays upgrades music label Universal Music Group UMG.AS to "overweight" from "equal-weight"

** Cites earnings upside from cost cuts and AI-related opportunities

** Notes the company has the lowest margins among peers; says matching the current efficiency efforts of rivals would translate into about €630 million ($709.25 million) of lower costs

** It expects revenue upside from digital service providers, says new AI subscription tier by Spotify could be a major catalyst

** Broker also sees additional revenue opportunities from licensing content to AI startups

** Barclays cuts its PT by 11% to €20 but says UMG's complexity and earnings volatility are now fully understood by the market

** Out of 24 analysts that cover the company, 14 rate the stock "strong buy" or "buy," ​6 rate it "hold" and4 rate the stock "strong sell" or "sell" - LSEG data

($1 = 0.8883 euros)

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.