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On Wednesday, CFRA analyst Kenneth Leon upgraded Live Nation Entertainment stock, trading on the New York Stock Exchange under the ticker (NYSE:LYV), from Sell to Hold, maintaining a price target of $135.00. Leon’s assessment suggests that the current share price aligns closely with the firm’s valuation of the company. According to InvestingPro data, Live Nation currently trades at a P/E ratio of 49.37x, with analysis suggesting the stock may be undervalued relative to its Fair Value.
The price target is based on a forward Total (EPA:TTEF) Enterprise Value/Earnings Before Interest, Taxes, Depreciation, and Amortization (TEV/EBITDA) multiple of 13.4x. This valuation is consistent with Live Nation’s five-year historical average, which is around 14.0x. Despite this, Leon notes that Live Nation does not generate sufficient earnings to support Price/Earnings (P/E) multiples that might be considered reasonable under other circumstances. The company’s current EV/EBITDA stands at 19.69x, with EBITDA reaching $1.8 billion in the last twelve months. For deeper insights into Live Nation’s valuation metrics and financial health score of GOOD, consider exploring InvestingPro, which offers comprehensive analysis through its Pro Research Reports.
CFRA’s earnings per share (EPS) estimates for Live Nation remain steady at $2.95 for the fiscal year 2025 and $2.85 for the fiscal year 2026. The analyst’s commentary reflects a cautious view of the company’s earnings power in light of its valuation metrics.
The upgrade comes after Live Nation shares experienced a significant decline of nearly 14% over the past two weeks. This sell-off was driven by concerns that consumer discretionary spending could be impacted by geopolitical risks. The analyst also pointed out that the high cost of live entertainment and ticket prices has raised questions about whether the record demand for these events will continue in the face of rising household living costs and declining consumer confidence.
Despite these concerns, Leon acknowledges Live Nation’s position as a market leader in ticket sales. The company is actively investing in capital expenditures to further develop its venue portfolio, signaling a commitment to growth in the live entertainment sector. With a market capitalization of $31.6 billion and annual revenue of $23.2 billion, Live Nation has demonstrated strong market performance, posting a 45% return over the past six months. InvestingPro subscribers have access to 12 additional key insights about Live Nation’s growth prospects and market position.
In other recent news, Live Nation Entertainment has been the focus of multiple analyst updates and regulatory discussions. BofA Securities increased its price target for Live Nation to $175 from $149, maintaining a Buy rating, following the company’s impressive fourth-quarter earnings, which showed a 60% growth in Adjusted Operating Income (AOI) on a constant currency basis. Evercore ISI also raised its price target to $180 from $160, citing strong consumer demand and a growing inventory of events, while maintaining an Outperform rating. However, Wolfe Research adjusted its price target to $165 from $175, retaining an Outperform rating but noting increased regulatory scrutiny as a potential challenge. This follows comments from FTC Commissioner nominee Mark Meador, who suggested the possibility of breaking up Live Nation and its subsidiary Ticketmaster to enhance competition. These developments have led to heightened investor attention on the company’s regulatory environment. Meanwhile, Engaged Capital, an investment advisor, has nominated two candidates for Portillo’s Inc.’s Board of Directors, citing the need for improved operations and marketing. Engaged Capital believes these changes could address the company’s underperformance and boost growth potential.
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