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Today is shaping up negative for Live Nation Entertainment, Inc. (NYSE:LYV) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the latest consensus from Live Nation Entertainment's twelve analysts is for revenues of US$6.0b in 2021, which would reflect a substantial 223% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$7.1b of revenue in 2021. The consensus view seems to have become more pessimistic on Live Nation Entertainment, noting the measurable cut to revenue estimates in this update.
Additionally, the consensus price target for Live Nation Entertainment increased 7.7% to US$82.27, showing a clear increase in optimism from the analysts involved. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Live Nation Entertainment, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$50.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Live Nation Entertainment's past performance and to peers in the same industry. For example, we noticed that Live Nation Entertainment's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 223% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 0.09% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 16% annually. Not only are Live Nation Entertainment's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Live Nation Entertainment this year. They're also forecasting more rapid revenue growth than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Live Nation Entertainment going forwards.
Unsatisfied? At least one of Live Nation Entertainment's twelve analysts has provided estimates out to 2025, which can be seen for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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