The Rise of Tencent Music Entertainment
Tencent Music Entertainment Group TME shares were ascending Wednesday following a report of robust fourth-quarter results.
In the midst of an exhilarating earnings season, analysts have extracted pivotal insights from the release.
Goldman Sachs Evaluates Tencent Music Entertainment
Analyst Lincoln Kong upgraded the rating to Buy from Neutral and adjusted the price target from $11.20 to $14.00.
Kong noted that Tencent Music Entertainment stands out as a top performer within their China Internet coverage for the past six months, with a high potential for continued outperformance.
The company is predicted to maintain an annual increase of over 15 million music subscribers in 2024, marking the fifth consecutive year of growth. Kong attributes this to the rising interest in music across various usage scenarios, minimal competition, and a track record of accepting price hikes.
Explore additional analyst stock ratings.
Mizuho Securities’ Take on Tencent Music Entertainment
Analyst Wei Fang reiterated a Buy rating and raised the price target from $12 to $13.
Fang highlighted that Tencent Music Entertainment’s core music revenues exceeded consensus estimates, mainly propelled by accelerated growth in subscriptions for business and advertising.
The company’s gross margins expanded by 260 basis points sequentially to 38.3%, surpassing Street projections by 150 basis points due to a change in product mix.
“The strategic shift towards core music growth aligns well with TME’s core strengths and resources,” Fang added.
Benchmark Weighs In on Tencent Music Entertainment
Analyst Fawne Jiang affirmed a Buy rating and elevated the price target to $14.
Jiang acclaimed Tencent Music Entertainment’s “solid” performance in the fourth quarter, attributing it to accelerated subscription growth driven by an increase in paying users and ARPPU expansion.
The management’s forward guidance indicates a continued positive trend in the upcoming periods, as per Jiang’s analysis.
Moreover, Jiang highlighted the successful transition of TME into a dominant player in online music in China, poised to benefit from the prevailing surge in music streaming adoption.
TME Price Action: At the time of publication on Wednesday, Tencent Music Entertainment’s shares had surged by 4.86% to $11.55.
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