Vivendi: Beat on EBITA estimates, partial sale of UMG getting closer
Vivendi: (NEUTRAL vs. SELL, Fair Value EUR22 vs. EUR21.5 (+3%))Beat on EBITA estimates, partial sale of UMG getting closer
Yesterday evening Vivendi published very good results, in line with expectations on revenues, but outperforming EBITA estimates by more than 5%, driven by a beat on all major businesses. Vivendi also announced the partial sale of UMG and the acquisition of editor Editis. Since our Sell initiation on May 14th, Vivendi’s stock is down 9%. We believe the stock has now appropriately adjusted, we are upgrading our recommendation to Neutral, as we advise investors to remain exposed to possible significant capital restructuring options. We are raising our fair value to EUR22 from EUR21.5 due to the revision of our UMG forecast.
Vivendi is an audiovisual group active in the entertainment industry with activities in music, TV, cinema, mobile, fixed and internet, and games. Co.'s operations are divided into five businesses: Canal+ Group which produces and distributes pay-TV in France, analog or digital, and is involved in film making; Universal Music Group which sells recorded music (physical and digital media); GVT which serves as a telecommunication operator for fixed ultra high-speed broadband, fixed-line telecommunications and Pay-TV in Brazil; SFR which is engaged in mobile phone services in France, as well as fixed and ADSL services; and Other Activities which involves ticketing, Wengo and Watchever.
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