** J.P. Morgan says Universal Music Group $(UMG.AU)$ UMG.AS is very undervalued within the music value chain, despite sharing the same customers as better-valued Spotify SPOT.N

** "We do not believe the valuation gap between Spotify and UMG is due to Spotify being overvalued, rather we believe it reflects that UMG is undervalued," it says

** Broker calls UMG's share price "100% wrong" as it does not reflect its "growth and quality"

** JPM points to UMG's recent streaming deals with Amazon AMZN.O and Spotify that should boost subscription growth

** "UMG is more diversified with music subscriptions only accounting for circa 47% of revenues today, whereas they represent circa 85% for Spotify," it adds

** As of Thursday's close, UMG shares are up 6.7% this year

(Reporting by Gianluca Lo Nostro)

((gianluca.lonostro@thomsonreuters.com;))