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Investing.com - BNP Exane Paribas has issued a positive outlook on Tencent Music (NYSE:TME) following the company’s third-quarter results that exceeded expectations. According to InvestingPro data, 9 analysts have revised their earnings upwards for the upcoming period, reinforcing the positive sentiment surrounding the company’s performance.
The firm highlighted Tencent Music’s Value-Added Services (VAS) segment, which grew 16% compared to analyst consensus expectations of 13%. Gaming performance was particularly strong with domestic gaming up 15% and international gaming surging 42%, driven by titles including Honor of Kings, Delta Force, Valorant, and Supercell games. This robust growth has contributed to TME’s impressive 80.34% price return over the past year, despite the stock taking a significant hit over the last week, falling nearly 15%.
Marketing Services showed robust performance with 21% year-over-year growth, outpacing consensus estimates of 18%. BNP Exane Paribas attributed this to higher ad impressions and AI-powered ad targeting, noting strength across all categories.
The Fintech segment grew 10% year-over-year, exceeding consensus expectations of 9%. Within this segment, fintech services specifically grew at high single digits due to payments and loans, while Business Services experienced teen percentage growth driven by cloud revenues.
BNP Exane Paribas summarized its view with the note "Q3 beat underpins LT appeal," suggesting the quarterly performance reinforces the long-term investment case for Tencent Music.
In other recent news, Tencent Music Entertainment Group reported its third-quarter earnings for 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $1.54, slightly above the forecasted $1.52, and generated revenue of $8.46 billion, exceeding the anticipated $8.23 billion. Meanwhile, CFRA adjusted its outlook on Tencent Music, lowering the price target to $21.00 from $25.00, while maintaining a Hold rating. The firm cited a cautious view on member growth from the company’s large paid user base.
Morgan Stanley reiterated its Overweight rating and maintained a $27.50 price target, highlighting Tencent Music’s strategic investments in concerts and merchandise as a positive long-term direction. Macquarie also maintained its Outperform rating but slightly lowered its price target to $28.30, noting the company’s solid third-quarter performance and strong non-subscription music revenue. These developments reflect a mix of cautious optimism and strategic focus for Tencent Music’s future.
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