Morgan Stanley raised its rating on Live Nation Entertainment (NYSE:LYV) from Equal-Weight to Overweight, with an increase in the price target from $100 to $110 per share. As a result, the company’s shares surged more than 5% intra-day today.
The analysts highlighted that as we approach 2024, the music and live events sector appears to be the strongest in the Media & Entertainment (M&E) industry. They emphasized Live Nation’s unique position to leverage the growing global live music market, expressing a heightened confidence in the company’s long-term growth prospects.
The analysts also pointed out Live Nation’s robust growth post-pandemic and the ongoing development of Venue Nation, which has contributed to an improvement in the company’s return on invested capital (ROIC). This improvement has been from low single-digit to mid-single-digit percentages pre-pandemic to mid-teens percentages currently.
Further, Mansson-Perrone mentioned that additional disclosures about Venue Nation and an analysis of future fan engagement opportunities strengthen the belief in more potential upside than risk to the consensus expectations for 2024.
The investment bank anticipates that the ongoing shift in consumer spending towards experiential purchases will continue to thrive, even amidst a softer macroeconomic environment.