Live Nation Entertainment (LYV) is an entertainment company offering live music concert tickets to customers through its Ticketmaster arm via websites, call centers, mobile apps, and retail outlets. It also partly owns various venues such as House of Blues, The Fillmore in San Francisco, the Hollywood Palladium, Brooklyn Bowl, 3Arena in Ireland, and the Ziggy Dome in Amsterdam.
Valued at $21.77 billion by market cap, Live Nation Entertainment stock is clinging to a 17% gain over the past 52 weeks, though the shares are underperforming considerably in 2024. LYV is up just 1.3% on a YTD basis, and is down 11.6% from its 52-week high of $107.24, set in March.
Live Nation Reports Mixed Earnings
Live Nation Entertainment reported its Q2 results in July, with the quarterly profit of $298 million, or $1.03 per share, edging out analysts' $0.98 per share estimate. During the quarter, sales totaled $6.02 billion - up 7% year over year, but missing Wall Street's $6.04 billion consensus. Results from Ticketmaster fell short, as management expected a growth rate of 9.4%, but only delivered 3% growth to $731 million.
The company ended the quarter with a cash balance of $6.4 billion, up from $6.23 billion as of Dec. 31, 2023, with a major impact due to debt repayment of $380 million on a YTD basis.
“We continue to see strong demand globally, with a growing variety of shows attracting both casual and diehard fans who are buying tickets at all price points, which speaks to the unique experience only live concerts can provide,” said CEO Michael Rapino in his statement.
However, the executive tempered his optimism somewhat by noting that "operating income will be impacted negatively by one-time accruals."
LYV stock closed modestly higher the day after earnings as investors sifted through the results.
Analysts Predict Long-Term Upside for LYV Stock
While the consensus estimate calls for full-year 2024 earnings to decline 13% to $1.19 per share, Wall Street is looking for LYV to earn $2.17 per share in fiscal 2025, up 82.4% annually.
Analysts are bullish on the entertainment stock overall, with a consensus “Strong Buy” rating among the 19 analysts in coverage. In fact, all but one analyst has a “Strong Buy” recommendation for LYV, with that single holdout opting for a “Moderate Buy.”
Last week, Bank of America analyst Peter Henderson joined the bullish contingent when he initiated coverage on LYV with a “Buy” rating, brushing off concerns about regulatory scrutiny for the company's Ticketmaster business in the process.
"As a global leader in live entertainment, we view Live Nation as a multi-year growth story underpinned by solid company fundamentals and several live entertainment tailwinds. LYV appears well positioned to drive double-digit AOI growth in the years ahead while risks from a DOJ break-up are largely priced in, and as such, we view risk/reward positively," wrote Henderson in a note to clients.
More specifically, the analyst stated that even if the company separates Ticketmaster, he expects both entities to keep delivering solid growth, “given robust fundamentals and numerous tailwinds.”
The mean 12-month price target for LYV on Wall Street is $120.50, implying expected upside of 27.4% to current levels. BofA's new price target is $125, a premium of more than 32%.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
