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BofA Securities analyst Peter Henderson initiated coverage on Live Nation Entertainment, Inc. (NYSE:LYV) with a Buy rating with a price forecast of $125.
The analyst views Live Nation as a compelling growth investment in the live entertainment sector, driven by positive industry trends.
According to Henderson, the stock is valued using a 14x multiple on CY25E AOI, which aligns with peer Madison Square Garden Entertainment and reflects favorable structural trends in live entertainment.
According to the analyst, several key factors will drive long-term growth. Firstly, there is a shift in consumer spending towards experiences bolstered by favorable demographic trends.
Secondly, positive supply and demand dynamics are emerging as social media platforms help discover more artists and events.
Thirdly, the intrinsic value of live events, which virtual experiences cannot replicate, prevents any risk of disintermediation.
Additionally, rising sponsorship opportunities and the growth of experiential marketing are contributing to this expansion. Finally, increased demand and enhanced dynamic pricing are strengthening pricing power.
The analyst projects a 4-year revenue CAGR (2023-2027) of 8% and AOI CAGR of 12% for Live Nation.
Live Nation’s extensive scale and vertical integration allow it to effectively compete on pricing, Henderson adds.
By owning multiple segments of the live entertainment chain, the company reduces risk and manages numerous events for various artists across different regions.
Provided there is no significant slowdown in consumer spending on live events, the analyst anticipates multiple revenue and earnings drivers for the live concert sector in the coming years.
Price Action: LYV shares are trading lower by 0.36% to $95.00 at last check Wednesday.
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