During a chaotic week for stock markets around the world, Universal Music Group (UMG) shares rose 3.3% to 22.15 euros ($24.
20), enough to make the Amsterdam-listed company the top-performing music stock of the week. Stocks were hammered on Monday (Aug. 5) as markets reacted to a disappointing U.
S. jobs report the prior Friday (Aug. 2), leading to mounting concerns the economy could fall into a recession.
The Billboard Global Music Index fell 2.0% on Monday, though it experienced a lighter decline than both the Nasdaq (down 3.4%) and the S&P 500 (down 3.
0%). Investors didn’t panic, however, and markets made gains over the remainder of the week. On Friday (Aug.
9), the Nasdaq closed down 0.2% for the week while the S&P 500 broke even. UMG received a boost on Wednesday (Aug.
7) from Warner Music Group’s quarterly earnings report — a welcome change after a second-quarter slowdown in UMG’s streaming growth so worried investors that the company’s shares fell 24% the following day. WMG’s latest earnings results, which showed that recorded music streaming revenue grew 8.7% after a few adjustments, may have convinced some UMG investors that they overreacted.
In light of this new information, UMG shares jumped 6.6% to 22.74 euros ($24.
85) on Wednesday. Notably, this Friday’s closing price is 14% above the lowest closing price — 21.12 euros ($23.
08) — since the 24% decline occurred on July 25. WMG shares rose 0.3% to $28.
34 this week after the company announced that quarterly revenue dropped 1% and net profit improved 14%. The third-largest major’s streaming gains satisfied some, but not all, analysts. Morgan Stanley analysts cited “lowered streaming growth outlook” in lowering their price target to $35 from $41.
Guggenheim, encouraged by WMG’s subscription revenue growth acceleration and performance relative to UMG, maintained its $44 price target. JP Morgan, which sees WMG as “well positioned” to capture paid streaming adoption, left its $41 price target unchanged. The Billboard Global Music Index, a float-adjusted measure of 20 companies’ market capitalizations, rose 3.
1%, breaking a streak of four consecutive weeks with a loss. Spotify, the index’s largest component, gained 2.6% to $339.
69. Tencent Music Entertainment, which will report earnings on Tuesday (Aug. 13), rose 2.
8% to $12.97. In the United Kingdom, the FTSE 100 declined 3.
6% to 8,168.10. South Korea’s KOSPI composite index fell 3.
3% to 2,588.43. China’s Shanghai composite index dropped 1.
5% to 2,862.19. iHeartMedia shares fell 10.
7% to $1.33 following the company’s second-quarter earnings on Thursday (Aug. 8).
The company reported a 1% increase in second-quarter revenue and sounded optimistic that political advertising will provide a boost to the full-year results. Both third-quarter and full-year revenue are expected to be up by mid-single digits. Shares of radio broadcaster Townsquare Media dropped 5.
8% following the company’s second-quarter results on Tuesday. Revenue fell 2.5% and net loss increased to $48.
9 million from $2.7 million in the prior-year period. Its $0.
14 earnings per share missed the Zacks Consensus Estimate of $0.42. !function(){"use strict";window.
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