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Analyst Raises Price Target on Tencent Music Entertainment Group by 35.7%

By Don Francis, Editor
May 15, 2024 7:10 AM UTC
Analyst Raises Price Target on Tencent Music Entertainment Group by 35.7%

Benchmark's Fawne Jiang raised their price target on Tencent Music Entertainment Group (NYSE: TME) by 35.7% from $14 to $19 on 2024/05/14. The analyst maintained their Strong Buy rating on the stock. This comes as Jiang assessed TME's Q1 2024 print, released on May 13, and expressed optimism about the company's performance.

Jiang stated that Tencent Music Entertainment Group's Q1 results "essentially checked all the boxes." The company reported earnings per share (EPS) of $0.13, showing an 18.2% year-over-year increase. However, revenue for the quarter came in at $935.9 million, representing a 3.4% decline compared to the same period last year. On a positive note, revenue from music subscriptions experienced significant growth, reaching $501 million, a 39.2% year-over-year increase.

In light of the positive earnings revision and multiple expansions, Jiang revised their profit projections upward and expanded their objectives for Tencent Music Entertainment Group's FY 2024 and 2025. The analyst's price target increase of 35.7% reflects their confidence in the company's future performance.

TME's management did not provide financial guidance in their press release or earnings call. However, Executive Chairman Mr. Cussion Pang commented on the company's impressive Q1 results, stating, "We kicked off 2024 with impressive results." Pang highlighted the robust growth in online music and the solid net profit margin expansion. CEO Mr. Ross Liang also expressed satisfaction with the higher-than-expected Q1 music subscriber growth and the recovery of the user base.

Mizuho's Wei Fang also issued an update on TME on May 14. Fang raised their price target by 13.3%, from $15 to $17, and maintained their Strong Buy rating on the stock. The consensus among top-rated analysts is that TME is a Strong Buy or Buy, with no analysts recommending a Hold or selling the stock.

Looking ahead, the consensus forecast among analysts is that TME will deliver an earnings per share (EPS) of $0.44 for the upcoming year. If the analysts' projections are correct, this would be a 3.9% decrease in EPS compared to the previous year.

Since TME's latest quarterly report, the stock price has experienced a 0.9% decline. However, on a year-over-year basis, the stock has seen a remarkable increase of 84.2%. During this period, TME has outperformed the S&P 500, which has only seen a 26.8% increase.

Benchmark analyst Fawne Jiang is regarded as one of the top analysts on Wall Street, ranking in the top 13% out of 4,585 analysts according to WallStreetZen. Jiang specializes in sectors such as Consumer Defensive and Consumer Cyclical, among others, and has an impressive average return of 6.5% and a 50.4% win rate.

Tencent Music Entertainment Group is an online music entertainment platform operating in the People's Republic of China. The company's services include music streaming, online karaoke, and live streaming. Tencent Music Entertainment Group operates platforms such as QQ Music, Kugou Music, and Kuwo Music, which offer personalized music discovery and listening experiences. Additionally, the company's WeSing platform allows users to sing and interact with friends, while Kugou Live and Kuwo Live provide a stage for performers to showcase their talent. Tencent Music Entertainment Group also sells music-related merchandise and offers event ticketing services. The company was formerly known as China Music Corporation and has been a subsidiary of Tencent Holdings Limited since 2012.

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