California-based Live Nation Entertainment, Inc. (LYV), with a market cap of $22.2 billion, is a leading live entertainment company that owns, operates, and holds exclusive booking rights for a range of venues, including iconic locations such as House of Blues, The Fillmore in San Francisco, Brooklyn Bowl, and the Hollywood Palladium.
Shares of the entertainment company have lagged behind the broader market in the last year. While LYV has surged 17% over this time frame, the broader S&P 500 Index ($SPX) has rallied by 28.9%. In 2024, the stock rose 2.6%, compared to SPX’s 11.2% return on a YTD basis.
Despite trailing the broader market, LYV stock slightly exceeded the Invesco Leisure And Entertainment ETF’s (PEJ) 11.1% gains over the past 52 weeks.
On May 23, shares of Live Nation Entertainment tumbled 7.8% following the Justice Department filing a lawsuit against its subsidiary, Ticketmaster. The lawsuit accuses Live Nation of using practices like long-term contracts and threats to maintain its dominance and prevent venues from using rival ticket sellers.
For the current fiscal year, ending in December, analysts expect LYV’s EPS to grow marginally year over year to $1.38. The company’s earnings surprise history is mixed. It beat the consensus estimate in two of the last four quarters while missing on two other occasions.
Live Nation Entertainment stock has a consensus “Strong Buy” rating overall. Out of 18 analysts covering the stock, 17 recommend a "Strong Buy," and one suggests a "Moderate Buy."
The consensus rating is slightly more bullish than a month before, with 15 analysts suggesting a “Strong Buy.”
On May 24, Roth MKM analyst Eric Handler maintains a “Buy” rating for Live Nation Entertainment with a $120 price target. He believes the DOJ's lawsuit will face significant challenges, noting Live Nation Entertainment's readiness to fight back and compliance with existing decrees.
Handler also points out that the company is open to discussing remedies, which are expected to have minimal impact on operations. He doubts the DOJ can prove monopolistic behavior, as Live Nation Entertainment primarily acts as a price taker, with artists setting ticket prices, resulting in modest adjusted operating income (AOI) margins. Additionally, Ticketmaster's fees have decreased and are lower than other digital platforms, making claims of excessive fees difficult to prove.
The mean price target of $118.53 suggests a 23.5% premium to LYV from current levels. The Street-high target of $131 represents an upside potential of 36.5%.
On the date of publication, Kritika Sarmah 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.
