--- title: "M Stanley Cuts Tencent Music Entertainment Group TP to USD10.1; More Clarity Needed on Competitive Outlook" type: "News" locale: "en" url: "https://longbridge.com/en/news/295606086.md" description: "Morgan Stanley lowered Tencent Music Entertainment's target price to USD10.1 and cut EPS forecasts for 2026-2028 by 3-7%, citing competitive pressures on membership revenue. While maintaining an 'Equalweight' rating, the broker noted that Ximalaya acquisition synergies may not offset short-term core business declines. Management expects strong revenue growth driven by IP and offline performances, but Morgan Stanley emphasized that clearer clarity on the competitive landscape is needed before any valuation re-rating." datetime: "2026-08-12T03:01:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295606086.md) - [en](https://longbridge.com/en/news/295606086.md) - [zh-HK](https://longbridge.com/zh-HK/news/295606086.md) generator: "portal-rs" --- # M Stanley Cuts Tencent Music Entertainment Group TP to USD10.1; More Clarity Needed on Competitive Outlook Morgan Stanley published a report lowering the TP for Tencent Music Entertainment Group (TME.US) from USD10.5 to USD10.1, while maintaining an "Equalweight" rating. The broker said synergies from the Ximalaya acquisition could become a variable during a relatively prolonged cycle of competition and earnings downgrades. Accelerated share buybacks may provide partial downside support, but clearer explanations regarding competition are still needed. Management expects 3Q26 total revenue to grow 8% YoY, with music-related revenue up 12.5%, membership revenue up 8.5%, and other revenue up 20%, alongside a net profit margin of 25.6%. Full-year revenue is expected to rise 7%, with music-related revenue increasing 12%, membership revenue up 7%, and other revenue up 22%, while net profit margin is forecast at 27.7%. The YoY growth is mainly driven by the Ximalaya acquisition and strong IP business performance, with merchandise and offline performances growing 40% to 50% YoY, though partly offset by weaker advertising and social business due to declining traffic. The broker noted that the guidance suggests Ximalaya's profit contribution will be insufficient in the short term to offset downward pressure on the core music business. M Stanley cut Tencent Music Entertainment Group's (TME.US) EPS forecasts for 2026 to 2028 by 3% to 7% to reflect weaker membership service revenue caused by competition. The broker said the current share price implies an attractive 2027 forecast PE ratio of 10x and cash-adjusted PE ratio of 6.6x, but valuation re-rating will depend on improvements in the competitive landscape, particularly as Mainland China's regulatory protection for AI-generated song covers and secondary music creations remains at an early stage. ### Related Stocks - [TME.US](https://longbridge.com/en/quote/TME.US.md) - [01698.HK](https://longbridge.com/en/quote/01698.HK.md) - [MS.US](https://longbridge.com/en/quote/MS.US.md) - [MS-O.US](https://longbridge.com/en/quote/MS-O.US.md) - [MS-Q.US](https://longbridge.com/en/quote/MS-Q.US.md) - [MS-E.US](https://longbridge.com/en/quote/MS-E.US.md) - [MS-I.US](https://longbridge.com/en/quote/MS-I.US.md) - [MS-L.US](https://longbridge.com/en/quote/MS-L.US.md) - [MS-P.US](https://longbridge.com/en/quote/MS-P.US.md) - [MS-A.US](https://longbridge.com/en/quote/MS-A.US.md) - [MS-F.US](https://longbridge.com/en/quote/MS-F.US.md) - [MS-K.US](https://longbridge.com/en/quote/MS-K.US.md) ## Related News & Research - [Nomura Downgrades Tencent Music Entertainment Group to Neutral, Cuts TP to USD10](https://longbridge.com/en/news/295917022.md) - [CLSA: TME-SW Completes Acquisition of Ximalaya; EPS Impact Expected Neutral](https://longbridge.com/en/news/286850820.md) - [15:42 ETThousands Gather as Ashley for the Arts Delivers a Weekend of Music, Art and Meaningful Impact](https://longbridge.com/en/news/296263323.md) - [09:45 ETFaceTec Issued New Patent by the USPTO](https://longbridge.com/en/news/296365720.md) - [07:49 ETSilver Palace gibt Details zum gamescom-Auftritt bekannt - weltweite Vorregistrierungen überschreiten die 10-Millionen-Marke](https://longbridge.com/en/news/296223897.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**