1、Media&Entertainment,Telecom&CableMusic-Market OverweightUNIVERSAL MUSIC GROUP N.V.(UMG-NL)August 1,2025UMG 2Q25:Savor the dulcet tones-Quality+Value+Catalysts?The Wolfe ByteDespite a strong 2Q,we cut 2H ests for costs&FX.UMG NA,-14%in the last week,trades near 5 year low P/E and EV/EBITD

2、A.2026 sales poised to accelerate andestimates are higher today than 6&12 months ago.Leading a growing industry.Compounder.Reit.OP,PT 30/sh.Universal Musics overall 2Q25 topline grew faster than expectations(constantcurrency).However,1H25 music publishing adj EBITDA fell short on-90bps y/yof mar

3、gin dilution.Cost pressures include merchandising,manufacturing&freightrelating to US tariffs.These cost nuances&a rising FX headwind arguably distractedthe market from real progress towards UMGs multi-year goals outlined at its InvestorDay.We see several possible catalysts that seem under-a

4、ppreciated by UMG NAs5 year trough P/E and EV/EBITDA.New deals w/Amazon&Spotify-Apple&YouTube to follow-provide pricing growth certainty and upside potential in 26.Streaming 2.0 premium tiers could materially boost sales in 26.Phase 2 of costsavings buttress 2H25(40M)and 2026(85M).While the

5、macro gives rise touncertainty,the rising value of music&the power of UMGs business model setup double digit%per share value compounding.We maintain our PT of 30/sh.based on 18x 26E EBITDA&reiterate Outperform.2Q25:Reported rev was in-line at 2.98B,beating on a y/y CC basis at+4.5%(cons:+3.7

6、%),driven by recorded music subscription&streaming growth of+8.6%y/y CC(cons:+7.0%)and music publishing+14.5%CC(cons:+10.6%).Adj EBITDA wasmarginally lower at 676M(cons:680M)on margins of 22.7%.2025:We lower rev to 12.26B(prev.12.31B)-FX headwinds are offset byunchanged recorded music y/y CC gro