Bernstein SocGen Group Starts Live Nation Entertainment (LYV) at Outperform

Bernstein SocGen Group initiates coverage on Live Nation Entertainment (NYSE: LYV) with a Outperform rating and a price target of $185.00.

The analyst comments "Live Nation (Outperform, $185 TP, 35% upside potential): Live entertainment isn’t a fad, and profitability just keeps getting better. We are bullish on LYV due to its powerful flywheel which has the potential to drive meaningful outperformance across each of its operating segments. Technological improvements coupled with changes in artist and consumer behavior, especially among younger generations, enhance the inherent scarcity value of live experiences and position Ticketmaster to grow GTV ahead of expectations (our +11% vs. consensus’ +HSD) into the summer concert season and beyond. As LYV’s Venue Nation expansion and VIP upgrade strategy complements a strengthening primary ticketing business, we are forecasting meaningful sponsorship growth (+mid-teens AOI vs. +LDD) on the upscaled inventory of opportunities for brands along with sizable uplift to concert margins (+50bps per year, generating +$50M in AOI vs. consensus) on a more favorable mix. We also believe that recent public and political pressure stems from a misunderstanding of the business and see the potential for multiple expansion as investor concerns ease. Valuation methodology: Our $185 TP is set via DCF and implies a 54x multiple, which is ahead of where the stock has traded over the past year. We assume a weighted average cost of capital of 10% and a terminal free cash flow growth rate of 3%."

For an analyst ratings summary and ratings history on Live Nation Entertainment click here. For more ratings news on Live Nation Entertainment click here.

Shares of Live Nation Entertainment closed at $138.55 yesterday.

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