EMI's hopes of cracking the US music market received a significant fillip yesterday when Coldplay, one of its most successful British bands, won record of the year for "Clocks" at the Grammy awards, America's most important music accolades.
At the same time analysts upgraded their share price targets for the company as the outlook for the US and UK record markets improved with Bear Stearns increasing its price target by 30 per cent to 310p, a level that would put EMI back in the FTSE100.
Consistent success in the US has proved elusive for EMI, which is why recognition of Coldplay at the Grammy awards in Los Angeles is so important. The last British artist to win record of the year was Eric Clapton seven years ago.
EMI also hopes its US sales will be boosted with the release today of a second album by Norah Jones,Feels Like Home. Her first album, Come Away With Me, has sold more than 18 million copies worldwide and 8 million in the US. Coldplay's success will give further impetus to EMI's strategy of developing acts with a long shelf life, after spending huge amounts in the 1990s on manufactured bands such as the Spice Girls.
Bear Stearns said its share price upgrade for EMI was prompted by expectations that final industry figures will show record sales in the second half of last year were stronger than expected. It also said EMI's full-year results on 24 May could surprise on the upside given further cost-cutting potential and its gains in market share.
A bullish buy note from analysts at Investec last Thursday highlighted the most recent industry research, which showed US album sales in January rose 10.4 per cent.
"There is a general feeling that music sales have bottomed and are on a slow but gradually improving trend," said analyst Kingsley Wilson.