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Investing.com - BofA Securities reinstated coverage of Tencent Music Entertainment Group (NYSE:TME), a prominent player in China’s entertainment industry, with a Neutral rating and a price target of $25.00. According to InvestingPro data, TME has demonstrated remarkable financial strength with a GREAT overall health score.
The firm’s decision comes as Tencent Music’s stock price has nearly doubled year-to-date, leading BofA Securities to view the current risk-reward profile as "fair" despite the company’s clear leadership in China’s music streaming market.
BofA Securities notes that TME now trades at 24 times 2026 price-to-earnings ratio, which represents a premium compared to both its five-year historical average of 20 times and the 19 times average for most China internet peers.
The firm identifies long-form audio content, such as podcasts and audiobooks, as TME’s potential next growth engine, particularly following the company’s recently announced Ximalaya acquisition.
Despite these growth prospects, BofA Securities does not anticipate a major re-rating of the stock in the near term, citing "time and uncertainties of integration" related to the Ximalaya acquisition.
In other recent news, Tencent Music Entertainment Group announced that it will release its financial results for the third quarter of 2025 on November 12. This follows the company’s impressive second-quarter performance, where it reported earnings per share of $1.55, surpassing the forecast of $1.42. Tencent Music’s revenue for the same period reached $8.44 billion, exceeding the anticipated $7.97 billion. These results indicate a strong performance for the company, which has been positively received by investors. The company’s board has also issued a notice regarding the timing of the third-quarter results announcement. These developments provide a glimpse into Tencent Music’s financial health and strategic planning. Investors will likely be paying close attention to the upcoming earnings release for further insights.
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