Live Nation 2Q Loss Widens; Shares Decline

Shares of Live Nation were down almost 3% in US morning trading after the company reported lower-than-expected revenues of $74.1 million in the second quarter. Analysts had estimated $268 million in sales. Live Nation posted a 2Q loss of $2.67 per share missing the consensus estimate for a loss of $2.08 per share, as the company’s live events were cancelled due to the COVID-19 pandemic.

Live Nation (LYV), a live entertainment company, recorded a steep fall of 98% in 2Q revenues, as a result of a decline in ticketing sales and concerts. The pandemic also hit its sponsorship and advertising business in 2Q. The company ended the quarter with $1.8 billion in free cash flow. The company’s CEO Michael Rapino said he is positive that its “live events will return at scale in the summer of 2021, with ticket sales ramping up in the quarters.” Live Nation is optimistic as 86% of concert fans are keeping their tickets for rescheduled shows next year. In addition, the company has around 19 million ticket sales for festivals scheduled in 2021.

Following Live Nation’s results, Berenberg Bank analyst Brett Knoblauch maintained a Hold rating on the stock with a price target of $40 (16% downside potential). He stated that “While we believe the company has taken steps to fortify its balance sheet and reduce cash burn, it is still too early to take a more positive view on shares as we remain cautious as to when live events will return and what the post-pandemic demand environment will look like.”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 1 Buy and 3 Holds. The average price target of $45.50 implies downside potential of about 4.5%. (See LYV stock analysis on TipRanks).

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