Live Nation stock analysis as it suffers major setback before earnings

Live Nation stock price dipped by over 1% on Wednesday as market participants reacted to a court decision in which a judge rejected a bid by the company to dismiss a major lawsuit. If dropped to $155, down from the year-to-date high of $160. Will the LYV stock rebound after earnings later today?

Live Nation suffers major legal setback 

The Live Nation stock price retreated after the company suffered a major legal setback. In a statement, Judge Arun Subramanian rejected Live Nation’s bid to dismiss a lawsuit by the Trump administration and many US states.

This lawsuit accuses the company of attempting to illegally dominate the concert industry through its ownership of many venues and Ticketmaster, a company that has a big market share in the ticketing industry. Also included are its businesses in key areas like promotions and concert booking.

The plaintiffs accuse the company of harming concert attendees and artists by reducing competition. In the end, the company may be forced to separate its venue business and Ticketmaster. However, most analysts believe that breaking the company apart will not solve the real problem.

Live Nation earnings ahead

The next major catalyst for the Live Nation stock price will be the upcoming financial results, which will come out after the market closes on Thursday.

Wall Street analysts believe that the upcoming results will show that its revenue rose by 7.5% in the fourth quarter to over $6.1 billion. If this is accurate, its annual revenue will be $25 billion, up by 8% YoY.

Analysts also believe that the revenue growth will continue this year, hitting over $27 billion as the concert industry continues booming.

The most recent financial results showed that the company's business did well, with its revenue rising to a quarterly record of $8.5 billion and its adjusted income rising to $793 million.

This growth was driven by a surge in sponsorship, which rose by 14% to over $443 million. Concert revenue jumped by 15% to $798 million, while venue revenue soared.

Wall Street analysts are largely bullish on the company, with the average stock target of $170, higher than the current $155. Some of the top analysts bullish on the company are Evercore, UBS, and JPMorgan.

Live Nation stock price technical analysis 

The daily timeframe chart shows that the Live Nation share price has rebounded in the past few months, moving from a low of $125.43 in November last year to a high of $160.

It then pulled back to the current level of $155 after the new legal developments. It has formed a bearish engulfing pattern, a common bearish reversal sign in technical analysis.

The stock has remained above the key support level of $150, its highest level in January this year. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA).

It also remained between the 23.6% and 38.2% Fibonacci Retracement level. It also remains above the Supertrend indicator.

Therefore, there is a risk that the stock may drop to $150 and then resume the uptrend. It will likely rebound to a record high of $175.