Tencent Music Entertainment Group [NYSE: TME] stock went on an upward path that rose over 1.70% on Friday, amounting to a one-week price decrease of less than -3.57%. The company report on January 29, 2021 that Consortium Including Tencent Music Entertainment Group Completes Acquisition of Additional Equity Interests in Universal Music Group.
Tencent Music Entertainment Group (“Tencent Music,” “TME,” or the “Company”) (NYSE:TME), the leading innovative online music entertainment platform in China, announced that a consortium (the “Consortium”), which is led by Tencent Holdings Limited (00700.HK) and comprising the Company (through one of its wholly-owned subsidiaries) and other co-investors, has completed the acquisition of an additional 10% equity stake (the “Transaction”) in Universal Music Group (“UMG”) from its parent company, Vivendi SE (VIV.PA) (“Vivendi”), through exercising the call option as announced in December 2020. The Transaction was based on the same enterprise value of EUR30 billion for 100% of UMG’s share capital as in the initial acquisition that closed in March 2020.
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Upon the closing of the Transaction, the Consortium’s equity ownership in UMG increased to 20% and TME will continue to have a 10% equity interest in the Consortium.
Over the last 12 months, TME stock rose by 85.33%. The one-year Tencent Music Entertainment Group stock forecast points to a potential downside of -10.85. The average equity rating for TME stock is currently 2.00, trading closer to a bullish pattern in the stock market.
The market cap for the stock reached $42.31 billion, with 1.66 billion shares outstanding and 605.81 million shares in the current float. Compared to the average trading volume of 12.06M shares, TME stock reached a trading volume of 16164286 in the most recent trading day, which is why market watchdogs consider the stock to be active.
Guru’s Opinion on Tencent Music Entertainment Group [TME]:
Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for TME shares is $23.14 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on TME stock is a recommendation set at 2.00. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.
Macquarie have made an estimate for Tencent Music Entertainment Group shares, keeping their opinion on the stock as Neutral, with their previous recommendation back on January 27, 2021. While these analysts kept the previous recommendation, Oppenheimer raised their target price from $20 to $28. The new note on the price target was released on January 19, 2021, representing the official price target for Tencent Music Entertainment Group stock. Previously, the target price had yet another raise from $17 to $21, while Needham kept a Buy rating on TME stock.
The Average True Range (ATR) for Tencent Music Entertainment Group is set at 1.26, with the Price to Sales ratio for TME stock in the period of the last 12 months amounting to 9.74. The Price to Book ratio for the last quarter was 5.58, with the Price to Cash per share for the same quarter was set at 0.91.
TME Stock Performance Analysis:
Tencent Music Entertainment Group [TME] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -3.57. With this latest performance, TME shares gained by 22.43% in over the last four-week period, additionally plugging by 54.80% over the last 6 months – not to mention a rise of 85.33% in the past year of trading.
Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for TME stock in for the last two-week period is set at 60.07, with the RSI for the last a single of trading hit 53.47, and the three-weeks RSI is set at 63.38 for Tencent Music Entertainment Group [TME]. The present Moving Average for the last 50 days of trading for this stock 21.01, while it was recorded at 26.36 for the last single week of trading, and 16.02 for the last 200 days.
Insight into Tencent Music Entertainment Group Fundamentals:
Operating Margin for any stock indicates how profitable investing would be, and Tencent Music Entertainment Group [TME] shares currently have an operating margin of +15.45 and a Gross Margin at +33.24. Tencent Music Entertainment Group’s Net Margin is presently recorded at +15.66.
Return on Total Capital for TME is now 9.64, given the latest momentum, and Return on Invested Capital for the company is 9.80. Return on Equity for this stock inclined to 9.81, with Return on Assets sitting at 8.20. When it comes to the capital structure of this company, Tencent Music Entertainment Group [TME] has a Total Debt to Total Equity ratio set at 0.34. Additionally, TME Total Debt to Total Capital is recorded at 0.34, with Total Debt to Total Assets ending up at 0.28. Long-Term Debt to Equity for the company is recorded at 0.18, with the Long-Term Debt to Total Capital now at 0.18.
Reflecting on the efficiency of the workforce at the company, Tencent Music Entertainment Group [TME] managed to generate an average of $159,634 per employee. Receivables Turnover for the company is 12.76 with a Total Asset Turnover recorded at a value of 0.52.Tencent Music Entertainment Group’s liquidity data is similarly interesting compelling, with a Quick Ratio of 3.50 and a Current Ratio set at 3.50.
TME Stock EPS
With the latest financial reports released by the company, Tencent Music Entertainment Group posted 0.11/share EPS, while the average EPS was predicted by analysts to be reported at 0.1/share. When compared, the two values demonstrate that the company surpassed the estimates by a Surprise Factor of 10.00%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for TME. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Tencent Music Entertainment Group go to 2.34%.
Tencent Music Entertainment Group [TME] Insider Position Details
There are presently around $12,169 million, or 74.10% of TME stock, in the hands of institutional investors. The top three institutional holders of TME stocks are: MORGAN STANLEY with ownership of 43,611,012, which is approximately 224.911% of the company’s market cap and around 9.67% of the total institutional ownership; BAILLIE GIFFORD & CO, holding 43,028,837 shares of the stock with an approximate value of $1.1 billion in TME stocks shares; and CANADA PENSION PLAN INVESTMENT BOARD, currently with $692.49 million in TME stock with ownership of nearly 0% of the company’s market capitalization.
Positions in Tencent Music Entertainment Group stocks held by institutional investors increased at the end of March and at the time of the March reporting period, where 138 institutional holders increased their position in Tencent Music Entertainment Group [NYSE:TME] by around 113,455,944 shares. Additionally, 119 investors decreased positions by around 54,104,305 shares, while 32 investors held positions by with 306,875,093 shares. The mentioned changes placed institutional holdings at 474,435,342 shares, according to the latest SEC report filing. TME stock had 50 new institutional investments in for a total of 14,596,957 shares, while 42 institutional investors sold positions of 21,994,312 shares during the same period.