Barclays upgrades Universal Music on cost-cutting, AI upside

Spotify Technology

02/10/2026 08:01

** 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)

(Reporting by Jerome Terroy)
((jerome.terroy@thomsonreuters.com))