Are you ready for a summer of music and entertainment? It doesn't matter whether you prefer rock, rap, comedy, or drama, there is something for everyone live and on stage this summer.
It's going to be a busy year for Live Nation Entertainment (LYV) , the concert giant that operates in over 40 countries and promoted over 43,000 live events in 2022. In the first quarter of this year, the company sold 145 million tickets to events through its Ticketmaster subsidiary.
Last week, Live Nation smashed first quarter earnings estimates, as revenue jumped 73% from the year-ago quarter. The loss of a quarter per share was better than the anticipated loss of 45 cents.
Technically, Live Nation's chart shows promise. The stock has finally broken above a bearish trendline (black dotted line) that has capped it for over a year. Volume was high, as Live Nation traded over four times its average turnover during the May 5 breakout (arrow).
Chart by TradeStation
While the stock has vaulted its bearish trendline, it is still struggling with its 200-day moving average (red). This leads me to believe the stock could pull back before moving higher. A retreat to $67 would result in a complete fill of the May 5 gap.
Live Nation still has plenty of room to rally. While the stock has gained 11.6% year-to-date, shares fell 41.73% last year. The stock trades well below its all-time closing high of $126.04, set on Feb. 25, 2022.
Live Nation received some good news on May 5, when the World Health Organization declared an end to Covid-19 as a "public health emergency of international concern." According to the WHO, while Covid-19 remains dangerous, an increase in immunity from both vaccination and infection has reduced the threat in many areas.
For many concert-goers, the fear of infection has mostly passed. Anecdotally, I noticed just a handful of masks at last week's tightly-packed Hoodoo Gurus concert in Philadelphia.
Live Nation Entertainment dominates the U.S. with a 70% market share. Earlier this year, the company was the target of a Senate Judiciary Commission hearing, with U.S. Sen. Amy Klobuchar referring to Live Nation's Ticketmaster subsidiary as a monopoly. Despite its domination of the U.S. market, the company has plenty of room for growth in emerging markets.
I'm taking a small position in Live Nation in the wake of its outstanding earnings report and subsequent breakout. I'll look to add if the stock falls into the May 5 gap, which extends approximately from $67 to $73.
