Analysts predict that Live Nation Entertainment, the parent company of Ticketmaster, will continue to flourish despite regulatory and economic obstacles. Ashton Welles, an analyst at Evercore ISI, recently upgraded the rating of Live Nation’s shares (LYV) from In Line to Outperform with a price target of $100.
As of Thursday, Live Nation’s stock had risen by 0.8% to reach $78.38, marking a 12% increase for the year.
Welles emphasized the significant potential for sustained double-digit growth in the company due to the growing consumer demand for concerts and live entertainment. The industry witnessed a surge in ticket sales as music artists were forced to cancel shows during the Covid-19 pandemic. Even now, several years later, popular artists like Beyoncé and Taylor Swift continue to sell out their stadium tours.
According to Live Nation Chief Executive Michael Rapino, this trend is not simply a result of pent-up demand or temporary stimulus money. Instead, it reflects a structural global change in the way people value and seek out memorable experiences.
Looking ahead, Live Nation is set to announce its third-quarter earnings on Nov. 2. Analysts surveyed by FactSet anticipate a 13% increase in revenue compared to the same period last year. This growth is particularly impressive considering the financial strain faced by consumers due to rising interest rates, persistent inflation, and increased prices for essentials such as gas, housing, and groceries.
Guggenheim Analyst Raises Price Target for Live Nation
Guggenheim analyst Curry Baker has increased his price target on Live Nation to $125, maintaining his Buy rating. Despite challenges faced by consumers, customer demand for Live Nation shows no signs of softness.
Regulatory Risks for Live Nation
In addition to consumer pressures, Live Nation is also encountering regulatory risks. Increased government scrutiny has focused on added fees in the live entertainment and travel industries. The Ticketmaster debacle during last year’s ticket sales for Taylor Swift’s Eras Tour heightened concerns and attention.
Defending the Business Model
Live Nation has defended its business model, reiterating its long-standing support for all-pricing, which displays upfront prices including fees. Chief Financial Officer Joe Berchtold addressed this at the Goldman Sachs Communicopia & Tech Conference, stating that their vertical business model is both pro-competitive and pro-consumer.
Investors’ Concerns Addressed
According to Welles, most Live Nation investors are concerned about the possibility of the Justice Department filing a lawsuit to break up the company. However, he believes that the likelihood of these concerns materializing is significantly lower than generally believed. Separating Ticketmaster from Live Nation is also a concern, particularly regarding its profitability.