Live Nation Entertainment: Rating Downgrade As Share Price Has Rallied Past My Price Target

(8min)

Summary

  • I downgraded Live Nation Entertainment from a buy to a hold due to its high share price, limiting upside potential despite strong growth prospects.
  • 3Q24 results showed a revenue decline but a 4.4% increase in adjusted operating income, indicating efficient cost management.
  • Demand remains robust with strong fan growth, new venue openings, and increased sponsorships, supporting long-term growth.
  • LYV's current valuation at 15x forward EBITDA makes it less attractive; I recommend waiting for a more favorable entry point.

Cheerful young man dancing with arms raised near girlfriend

Klaus Vedfelt

Investment summary

My previous investment thought on Live Nation Entertainment (NYSE:LYV) (published in August) was a buy rating, as I was positive on the growth outlook, which is well-supported by LYV's competitive advantage and the various positive data points. In

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I focus on long-term investments while incorporating short-term shorts to uncover alpha opportunities. My investment approach revolves around bottom-up analysis, delving into the fundamental strengths and weaknesses of individual companies. My investment duration is the medium to long-term. Ultimately, I aim to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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