The analysts report Live Nation Entertainment, Inc. ((NYSE: LYV) delivered a dose of negativity to shareholders today by fundamentally revising their legal outlook for this year. Revenue and earnings per share (EPS) forecasts have been revised downwards, with analysts seeing gray clouds on the horizon.
After this downgrade, the twelve analysts at Live Nation Entertainment forecast revenues of $ 6.4 billion in 2021. This would be a significant sales improvement of 246% compared to the last 12 months. Losses are expected to decrease significantly, falling 59% to $ 3.29. Before the latest estimates, however, analysts had forecast sales of $ 7.3 billion and a loss of $ 1.96 per share in 2021. So there has been quite a change of opinion following recent consensus updates, with analysts taking a serious cut to their sales forecasts while anticipating a spike in losses per share.
The consensus price target rose 10% to $ 81.82, which clearly indicates the weaker revenue and EPS outlook shouldn’t weigh on the stock long term. However, setting a single price target can be unwise because the consensus target is effectively the average of the analyst price targets. As a result, some investors enjoy looking at the various estimates to see if there are different opinions about company valuation. Right now, the most bullish analyst rates Live Nation Entertainment at $ 100.00 per share, while the most bearish analyst rates it at $ 50.00. That’s a pretty wide spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the company.
Now, looking at the bigger picture, one of the ways we can understand these projections is by seeing how they measure up against both past performance estimates and industry growth estimates. For example, we’ve determined that Live Nation Entertainment’s growth rate is expected to accelerate significantly. Annual sales growth of 246% is forecast until the end of 2021. This is well above the historic decline of 0.09% per year over the past five years. In contrast, our data suggests that other companies (with analyst coverage) in the industry are forecasting revenue growth of 15% per year. So it looks like Live Nation Entertainment is growing faster than its peers, at least for a while.
The bottom line
Most importantly, analysts have increased their estimates for loss per share for this year. Unfortunately, analysts have also downgraded their revenue estimates, although our data suggests that revenue is likely to outperform the broader market. The rising target price is a mystery, but with a serious cut to this year’s outlook, we wouldn’t be surprised if investors were a little suspicious of Live Nation Entertainment.
Still, the long-term prospects for the business are far more relevant than next year’s results. We have estimates – from multiple analysts at Live Nation Entertainment – for 2025, and you can See them here for free on our platform.
See company management, of course invest large sums of money in a stock can be just as useful as knowing if analysts are downgrading their estimates. You may also want to look for this free List of stocks that insiders are buying.
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