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Goldman Sachs: Buy Live Nation stocks

The investment bank has initiated coverage of Live Nation Entertainment, giving shares a 'buy' rating amid "steady attendance growth in a wide array of live music events"

By IQ on 07 Apr 2017

Michael Rapino, Live Nation Entertainment (LYV)

Live Nation CEO Michael Rapino


Investment banking giant Goldman Sachs has begun tracking Live Nation’s financial performance, assigning the company’s stocks a ‘buy’ rating following a period of sustained growth.

Shares in Live Nation Entertainment (LYV), which trades on the New York’s Nasdaq stock exchange, today reached an all-time high of US$31.31. Goldman analysts have given Live Nation stocks a target price of $35.

Outlining the logic behind the buy rating, CNBC reports Goldman Sachs’s Drew Borst told clients: “As the world’s largest concert promoter […] and ticketing platform, LYV is uniquely positioned to benefit from secular growth in global concerts and gain marketshare.

“Touring has become increasingly important to artists’ income, given the decline in album sales. On the demand side, the millennial ‘experience economy’ is fuelling steady attendance growth in a wide array of live music events.”

“Live Nation is uniquely positioned to benefit from secular growth in global concerts and gain marketshare”

Live Nation recorded record revenue for the sixth year running in 2016, growing turnover 15% to $8.4 billion.

However, Brandon Ross, an analyst for financial services firm BTIG, warns the profitability of Ticketmaster could be undermined in the long term by Amazon Tickets, which is gearing up for expansion in the US and strengthening its ties with Live Nation rival AEG.

He notes Amazon “has the aptitude to become [a music] industry player, if it can gain access to US tickets market”,  and can “target casual shoppers from its large userbase, bundling tickets with other products”.

 


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