Analyst Yang Liu CFA from Morgan Stanley maintained a Buy rating on Tencent Music Entertainment Group (TME – Research Report) and increased the price target to $14.70 from $13.00.
Yang Liu CFA has given his Buy rating due to a combination of factors including Tencent Music Entertainment Group’s positive outlook for 2025 and its strategic focus on financial performance. The company anticipates a revenue growth acceleration driven by healthy music subscription and advertising revenue, particularly through a new web-based model. Management is prioritizing revenue and profit over short-term operating metrics, which reflects a strategic shift towards long-term financial health.
Moreover, TME is expected to achieve its medium-term gross profit margin targets ahead of schedule, with significant contributions from operating leverage in music subscriptions, high-margin advertising growth, and reduced revenue sharing in its social business. The integration of DeepSeek AI into its music platforms is also enhancing user experience and engagement, offering new commercial opportunities. These strategic initiatives, alongside an improved industry outlook, have led to an increase in revenue and profit forecasts, justifying the Buy rating.
According to TipRanks, Liu CFA is ranked #313 out of 9384 analysts.
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