In spite of impending legal issues, TD Cowen maintained its buy rating and $108.00 price target for Live Nation Entertainment (NYSE:LYV) shares on Tuesday.
According to a recent Wall Street Journal article, the Department of Justice (DOJ) is getting ready to sue the corporation for antitrust violations as early as next month.
The lawsuit’s contents, such as whether it would call for the company’s total dissolution or more moderate measures like outlawing exclusive arrangements with venues, are still unknown.
In after-hours trading, Live Nation’s shares fell 9% in response to the Wall Street Journal report. Paul Gallant, TD Cowen’s TMT policy analyst, previously calculated a 70% chance of the DOJ filing a lawsuit.
Politico reported last year that the DOJ may target Ticketmaster’s exclusive arrangements with venues. If this turns out to be the case, Live Nation may be forced to get out of the ticket resale market and renegotiate venue deals.
The analyst thinks that a possible full divestment by Live Nation would not be well received by the market.
On the other hand, Live Nation’s stock might benefit if the lawsuit leads to fewer limitations, including bans on secondary ticketing or exclusive venue partnerships.
Although the DOJ’s investigation and related lawsuit have not yet concluded, TD Cowen continues to stand by its Live Nation stock valuation.
InvestingPro Perspectives Investors may find more insight in Live Nation Entertainment’s (NYSE:LYV) current financial data and market performance when assessing TD Cowen’s Buy recommendation and price target.
With a market valuation of $22.89 billion, Live Nation is well-represented in the entertainment sector, according to statistics from InvestingPro.
Although the company’s PEG ratio of 0.64 indicates that its profits growth could justify current value, the P/E ratio of 68.83 for the last twelve months as of Q4 2023 is high.
Furthermore, as of Q4 2023, Live Nation’s revenue growth has been strong, rising 36.38% over the previous year.
In view of its low P/E ratio in relation to expected short-term earnings growth, Live Nation appears to be a compelling investment opportunity.
This could indicate an appealing investment opportunity for investors who are interested in prospective growth.
In addition, investors may feel more at ease about any legal issues given the company’s standing as a major participant in the entertainment sector and experts’ estimates of profitability this year.
Conversely, investors may want to keep an eye on the company’s low gross profit margins of 23.99% and its failure to pay dividends.