Universal Music can protect itself against the coming AI storm, that’s according to analysts at Deutsche Bank.
The German bank in a note following the record label’s quarterly results repeated a ‘buy’ recommendation.
Universal’s results released on Wednesday night came reported first-quarter revenue at €2.45bn, compared to the prior year comparative of €2.19bn. Earnings (EBITDA) was reported at €261mln, down from €454mln a year earlier.
“UMG had a good start to the year and remains on track to meet FY targets,” Deutsche analyst Silvia Cuneo said in a note. “Both revenue and adj. EBITDA were c. 2% ahead of consensus expectations.
“However, today, we expect the stock to perform in-line with the market as investors weigh the positives of a beat driven by physical revenue streams, which are less recurring and predictable than streaming, vs the limited implications of the unchanged outlook to forward expectations.”
The analyst added: “Overall, we come away feeling reassured UMG is equipped to protect its content in the fast-developing generative AI space, and has made progress towards a more artist-centric monetisation model for music streaming.”