Shares of Spotify rose 8.0% to $365.00 this week to lead all music stocks in a week, Billboard's global music index hit a new high and many of its biggest figures scored mid- to high single digit earnings.
The Swedish music streaming giant was boosted by a report from Pivotal Research Group that raised its price target to $510 from $460 and reiterated a “buy” rating. Spotify's intraday high of $368.29 on Thursday set a new 52-week high for the stock and was its best mark since February 21, 2021.
Spotify led the 20-company Billboard Global Music Index (BGMI) to a record high of 1,873.87, up 4.1% for the week, as ten of the stocks posted gains this week, nine lost and one was flat. After falling 4.8% in the week ended Sept. 6 and stagnating since March, BGMI has rallied 7.4% over the past two weeks and extended its year-to-date gain to 22.2%—more than two percentage points above the gains of the Nasdaq composite (up 19.6%) and the S&P 500 (also up 19.6%).
Stocks had a generally good week after the U.S. Federal Reserve on Wednesday announced a half-percentage point cut in interest rates, the first time the central bank has cut its overnight lending rate since the early days of the COVID-19 pandemic. However, investors had been waiting for the Fed's move and had priced in the effect of the rate cut on stock prices. However, the Nasdaq composite climbed 1.5% to 17,948.32 and the S&P 500 rose 1.4% to 5,702.55. South Korea's KOSPI improved 0.7 percent to 2,736.81 and China's Shanghai Composite rose 1.2 percent to 2,736.81. In the UK, the FTSE 100 fell 0.5% to 8,229.99.
Warner Music Group gained 4.9% to $30.44. WMG's Atlantic Music Group laid off about 150 people on Thursday as part of a restructuring plan that began in February. The week's intraday high of $30.88 was WMG's highest price since reaching $32.34 on July 24. The company also announced in an SEC filing this week that it has secured a $1.3 billion term loan that will be used to repay an existing loan and pay related fees and expenses.
Shares of Live Nation also gained 4.9% to $103.65 and extended their year-over-year improvement to 10.7%. Thursday's intraday high of $105.42 was the highest mark since April 1 and less than $2 below the 52-week high of $107.24. The concert promoter scored a victory in Portland, Ore., this week after the city council upheld an August decision to allow development of a 3,500-seat music venue operated by Live Nation.
Two other promoters also posted gains this week. MSG Entertainment rose 4.6 percent to $42.16, while CTS Eventim improved 1.2 percent to 87.90 euros ($98.23). Another live entertainment company, Sphere Entertainment Co., fell 2.7 percent to $41.09.
K-pop companies' moderate decline was an improvement from their consistently steep declines in recent weeks. The four South Korean companies had an average loss of 1.2% this week. HYBE fell 2.4%, JYP Entertainment fell 1.2%, YG Entertainment fell 0.9%, and SM Entertainment lost 0.2%. After rising in previous years, the quartet has averaged a year-to-date loss of 40.4%.
Universal Music Group fell 3.6 percent to 22.75 euros ($25.42) after the Capital Market Day on Tuesday. Analysts generally felt that UMG set achievable financial targets and presented a credible roadmap for its strategy over the next four years. The Amsterdam-listed company has set a strategy to achieve 8% to 10% compound annual growth rate (CAGR) for subscription revenue and over 7% CAGR for total revenue.
Music streaming LiveOne had the week's biggest drop, down 6.1% to $1.38. That put LiveOne shares in the red for 2024 with a year-to-date loss of 1.4%.
