Shares of Live Nation jumped 7.2% to $94.66 on Friday after the company reported earnings on Thursday (May 2), which showed the concert promotion and ticketing giant had a record first quarter. Revenue of $3.8 billion was up 21% year-over-year, and the company said it expects strong results in 2024 from its high-margin space and amphitheater businesses.
Investors may have been encouraged by Live Nation's insistence during Thursday's earnings call that the US Department of Justice does not pose a mortal threat to the company. Commenting on an April 16th Wall Street Journal article about a pending DOJ lawsuit, president and CFO Joe Berchtold rejected the idea that regulators could force Live Nation to shut down its concert promotion and ticketing businesses. “Very little of the conduct the DOJ raised with us relates to the combination of ticketing and promotion resulting from the merger,” he said. “And most of that was anticipated and addressed by the consent decree that allowed the merger to go forward.
“Based on the issues we are aware of,” Berchtold added, “we do not believe that breaking up Live Nation and Ticketmaster would be a legally permissible solution.”
Live Nation hasn't fully recovered since news of a pending DOJ lawsuit broke. By Wednesday (May 1), Live Nation shares had lost 11.5% since WSJ article. Friday's 7.2% gain helped Live Nation recover nearly half of that loss.
Many analysts are bullish on Live Nation stock. On Tuesday, Deutsche Bank initiated coverage on Live Nation with a $120 price target and a “buy” rating. After Thursday's earnings release, Jefferies raised its price target to $115 from $114, Wolf Research raised its price target to $131 from $128 and Benchmark raised its price target to $132 from $130. However, CFRA downgraded Live Nation to “hold” from “strong buy” and cut its price target to $105 from $120.
Live Nation was one of the best performing stocks in a week, the vast majority of them posting gains. Seventeen of the index's 20 stocks gained ground this week, helping it Billboard Global Music Index it improved 3.8% to 1,824.29 and almost matched the all-time high of 1,841.66 reached four weeks ago. Two stocks — Abu Dhabi-based Anghami and New York-based Reservoir Media — posted losses and one, French music label Believe, was flat.
Universal Music Group shares rose 4.9 percent to 28.92 euros ($31.16) after releasing first-quarter earnings on Thursday and announcing the renewal of its licensing deal with TikTok. UMG's profit rose 6% (8% in constant currency) to 2.59 billion euros ($2.8 billion) and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved 13.2% to 591 million euros ($640 million).
K-pop label SM Entertainment was the best performer of the week after gaining 5.9% to 85,800 won ($63.27). Warner Music Group rose 5.4% to $34.14. iHeartMedia rose 5.1% to $2.25. Cumulus Media gained 2.6 percent — and was up 4.2 percent on Friday — after first-quarter earnings showed a 2.7 percent drop in revenue to $200 million, in line with previous guidance.
Shares of SiriusXM improved 3.3% to $3.12 this week, despite falling 7.2% on Monday, after its first-quarter earnings report showed the company's self-pay subscribers fell 1, 4%. Many analysts cut their price targets in the wake of the earnings. Barrington dropped SiriusXM to $4.75 from $5.75 and maintained an “outperform” rating. Deutsche Bank cut its price target to $3.75 from $5 and maintained a “hold” rating. Goldman Sachs cut its price target to $3.25 from $3.50 and upgraded its rating to “neutral” from “sell.”
