MSGS - 3 Music Stocks to Buy as Concerts Make a Comeback
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Music stocks were rocked by Covid-19. Bands couldn’t tour. Concert halls were shut down. Millions of fans couldn’t pack into clubs anymore to see their favorite bands. By the end of 2020, Pollstar, as noted by the Chicago Tribune said, “the live events industry should have hit a record-setting $12.2 billion this year, but instead it incurred $9.7 billion in losses.”
However, vaccines, testing and new sanitization efforts could have the industry singing a different tune in 2021. In fact, the concert industry is just beginning to show signs of life, with festivals like Bonnaroo and Lollapalooza scheduled. Even Metallica, Guns n’ Roses, Cheap Trick, Van Morrison, Ace Frehley and dozens more are kicking off new tours this summer. Madison Square Garden and Carnegie Hall also just announced new reopening plans.
With plenty of bands ready to hit the road, and millions of fans ready to get back to live events (including myself), there’s hope the industry can get back to some sort of normalcy. In fact, as the industry begins to show signs of life, here are some of the top stocks to consider.
- Live Nation Entertainment Inc. (NYSE:LYV)
- Madison Square Garden Sports Corp. (NYSE:MSGS)
- Eventbrite Inc. (NYSE:EB)
Best Music Stocks: Live Nation Entertainment (LYV)
When the coronavirus shut everything down, Live Nation Entertainment had no business. No shows. No tours. Nothing. So it came as no shock its stock plummeted from $74.91 to a low of $27.51. It was also no surprise that first quarter 2021 revenue fell 79% year over year.
The good news is concert venue bookings are just beginning to rebound. “What we are seeing so far is that the number of shows we have booked in our large buildings, our arenas, our amphitheaters, our stadiums, those are pacing double digits ahead of where we were in 2019. Not all of those tours have gone on sale yet, we have a lot that are going on sale now every week,” company president Joe Berchtold told CNBC. Better, the company says concert demand should remain high moving forward.
Helping, Jefferies analyst David Katz recently upgraded the stock to a buy rating, with a price target of $98 a share.
Best Music Stocks: Madison Square Garden Sports Corp. (MSGS)
The Madison Square Garden stock fell from a high of $224.69 to a low of $130.12. It has since recovered to $175.72, where it is again oversold at triple bottom support. Much like with LYV, we expect to see higher highs with MSGS, as live entertainment makes a return.
Helping, the Garden will be back up to 100% capacity from 30% in May 2021, when it hosts the Foo Fighters on June 20. “The Garden is ready to rock. We’ve been waiting for this moment for 15 months and are excited to finally welcome a packed house of roaring, fully-vaccinated Foo Fighters fans to Madison Square Garden,” said James Dolan, Executive Chairman and CEO of MSG Entertainment, as quoted in a company press release.
Hopefully, we’ll see a strong return with earnings growth, as well.
All after posting revenues of $43.1 million, a decrease of $138.8 million year over year. MSGS also posted an operating loss of $108.6 million, and an adjusted operating loss of $69.4 million.
Best Music Stocks: Eventbrite Inc. (EB)
When the world shut down, Eventbrite fell from a high of $22.30 to $5.71. It has since recovered to about $21, where it’s been consolidating for the last several months. Much like the other stocks above, EB could push higher as folks head to events again, and with revenues expected to recover.
“Pent-up demand for in-person experiences is reconnecting with the expanding number of live events on the Eventbrite platform, and our creators are beginning to thrive once again,” said Julia Hartz, Eventbrite Co-founder and CEO as quoted in a company press release. “Eventbrite entered 2021 a stronger, leaner company, positioned to lead our industry’s recovery and re-invention. Our first quarter results begin to hint at the strength of our strategy.”
In its first quarter, the company posted net revenue of $27.8 million, as compared to $48.1 million year over year. It was also a slight improvement from the $26.7 million posted in the previous quarter. Net loss was $84.9 million, as compared to its $146.5 million loss year over year. In addition, while paid ticket volume fell 7% quarter over quarter, the company did see an increase in volume between January and March 2021.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
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