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Friday, September 27, 2024

No Coldplay Tickets? No Worries, Celebrate with these stocks!!!

By Century Financial in 'Investment Insights'

No Coldplay Tickets? No Worries, Celebrate with...
Coldplay

The tickets for the Coldplay concert in Abu Dhabi, to be held at the Zayed Sports City Stadium with a capacity of 43,000, sold out in minutes. Due to the overwhelming response, a second show has been added on January 12th. Coldplay, a British rock band formed in 1997, is one of the most celebrated music bands of all time and has two of the fifteen highest-grossing tours of all time. The Abu Dhabi concert is part of their 'Music of the Spheres World Tour 2025.'

The high demand for the tickets reflects the strong fundamentals of the live concert and sporting events industry. The business is now booming after the end of the pandemic, and this sector has huge potential due to the growing demand for live entertainment. Higher ticket demand has led to ticket price inflation, and additionally, there are now diverse revenue streams such as sponsorships, merchandise, and food/beverage sales at the event site. For example, the UAE event is going to be sponsored by Etihad Airways and Abu Dhabi tourism.

Ticker Name Description Market Cap
(In Billions)		 ICB Subsector Name Last Price Bloomberg Target Price Potential Share Price Appreciation Recommendation Consensus
(Out of 5)		 Buy Recommendations
out of Total		 Beta
LYV Live Nation Entertainment Inc. Produces live concerts and sells tickets to those events over the internet. $24.94 Recreational Services $107.43 $118.00 9.84% 4.55 18 out of 22 1.08
BATRA Atlanta Braves Holdings Inc. - Class A Owns Atlanta Braves Major League Baseball club and associated mixed-use development projects. $2.54 Recreational Services $42.71 $59.00 38.14% 5.00 2 out of 2 0.53
MSGE Madison Square Garden Entertainment Corp. Owns and operates entertainment venues and hosts live events such as concerts, family shows, professional boxing, etc. $1.98 Recreational Services $41.27 $46.86 13.54% 4.33 6 out of 9 1.02
EB Eventbrite Inc. Eventbrite is an international ticketing platform that equips event organizers and attendees with a robust set of tools. $0.27 Consumer Digital Services $2.82 $5.13 81.91% 3.57 2 out of 7 1.23

*Last Price as of 24 September 2024.
Date: 25 September 2024
Source: Bloomberg

Live Nation Entertainment (LYV)

Live Nation Entertainment is a prominent global entertainment company that provides a comprehensive suite of services, including live event organization, ticketing solutions, and artist management. Operating through its Live Nation Concerts, Ticketmaster, and Live Nation Sponsorship divisions, the company facilitates a wide range of concerts and festivals across 370 venues globally, representing a diverse roster of artists. Leveraging its Ticketmaster platform, it offers advanced digital ticketing tools, ensuring ecient ticket sales and distribution. Moreover, the company's strategic partnerships with brands create unique sponsorship opportunities, enhancing fan experiences at events.

The company intends to host over 60 million fans at its events this year, marking double digit growth. It is actively expanding its portfolio of hospitality venues through acquisitions and new developments. Simultaneously, it is investing in enhancements to elevate the guest experience at its existing properties. LYV has 14 new venues under development, scheduled to open between 2024 and 2025. Over the past two years, Live Nation has enhanced the hospitality experience at approximately one-third of its amphitheatre portfolio, resulting in an average return on investment exceeding 30%. Live Nation's sponsorship business is characterized by long-term contracts with major brands, which provides a degree of stability during periods of economic downturn.

Analysts anticipate a resurgence of stadium tour activity in 2025, which could drive revenue growth. During the company's second-quarter 2024 earnings call, management indicated that Live Nation's pipeline of stadium shows for 2025 is currently more robust than it was at a similar point in 2023, a year marked by exceptional stadium show activity. This is expected to enhance the company’s financial performance from the fourth quarter of 2024 onwards due to the extended booking lead times for these events.

Atlanta Braves Holdings Inc. – Class A (BATRA)

Atlanta Braves Holdings Inc. is the parent company responsible for owning and operating the Atlanta Braves Major League Baseball team. The company oversees various aspects of the franchise, including team management, stadium operations at Truist Park, and the adjacent mixed-use development, The Battery Atlanta. Beyond managing the team's on-field performance, the company focuses on maximizing revenue through ticket sales, broadcasting rights, merchandise, sponsorship deals, and fan engagement.

In Q2’2024, the company’s revenue surged 5% to $283 million – of which baseball revenue increased 4% to $266 million while mixed-use development revenue grew 11% to $17 million. New sponsorship agreements, along with contractual rate increases for season tickets and existing sponsorships, contributed to growth in baseball event revenue, although this was partially offset by a reduced number of regular season home games. Broadcasting revenue increased primarily due to a larger number of regular season games played and contractual rate increases. The increase in mixed-use development revenue was riven by increased rental income from tenant recoveries and higher parking revenue. Both operating income and adjusted EBITDA rose 28% to $25 million and 9% to $46 million, respectively.

Atlanta Braves Holdings Inc. has unveiled plans to introduce new and expanded seating options at Truist Park, scheduled to be available for the 2025 season, as part of its ongoing commitment to enhancing the fan experience. This is expected to enhance revenue growth.

Madison Square Garden Entertainment Corp. (MSGE)

Madison Square Garden Entertainment is a prominent global entertainment company with a 150-year history. It owns and manages some of New York City’s most renowned venues and sports franchises. Its portfolio includes the iconic Madison Square Garden arena, Radio City Music Hall, and the professional sports teams called the New York Knicks and New York Rangers. MSG Entertainment operates across multiple sectors of the entertainment industry, including live events, ticketing, sports management, and merchandising. The company is dedicated to delivering outstanding experiences to fans and guests by hosting a wide variety of events, such as concerts, sporting events, family shows, and corporate gatherings.

The company reported strong financial results for fiscal 2024, exceeding its own guidance amid robust demand for live events. The company swung to a profit in the fourth quarter, with net income increasing from -$24.5 million to $66.9 million. Operating loss narrowed from -$21.8 million to -$8.9 million. Quarterly revenue rose 26% to $186.1 million, primarily driven by increased entertainment offerings. For the full fiscal year, MSG reported operating income of $111.9 million, surpassing its target range of $100 million to $110 million. Revenue increased by 13% to $959.3 million, exceeding the guided range of $940 million to $950 million.

In September 2024. The company formed a strategic partnership with global tech brands Lenovo and Motorola Mobility. This collaboration is aimed at marketing the products of Lenovo and Motorola through commercials on MSG Networks, featured ads across VIP seating areas and the arena’s centre-hung media display, etc. Looking ahead, MSG's leadership expressed optimism about the company's ability to generate robust adjusted operating income growth in fiscal 2025, leveraging its unique portfolio of live entertainment offerings. This marks the first year of operations for MSG as a standalone public company following its separation from the regional sports network and Las Vegas investment.

Eventbrite Inc. – Class A (EB)

Eventbrite is an international ticketing platform that equips event organizers and attendees with a robust set of tools. It allows individuals and businesses to create, promote, and sell tickets for various events, such as conferences, concerts, festivals, and workshops. Eventbrite’s offerings include event registration, ticketing, marketing tools, and payment processing, making it a favored choice among event organizers globally. Furthermore, it provides a platform for attendees to discover and purchase tickets for events both locally and internationally.

In Q2’2024, Eventbrite’s revenue rose 7% YoY to $84.6 million, but slightly lower than consensus estimates. Net revenue per paid ticket increased by 14% YoY to $3.98 while the number of paid tickets declined by 9% to 21.2 million. The company reported a net profit of $1.1 million for the quarter, or 1 cent per share, compared to a net loss of $2.9 million, or 3 cents per share, in the previous year. Eventbrite delivered third-quarter revenue guidance of $74-$77 million and full-year revenue guidance in the range between $318-$325 million. Eventbrite is implementing an 11% reduction in its workforce, expected to result in annual cost savings of $30 million. The company's revised forecast indicates an expected adjusted EBITDA margin of 10% for the full year 2024, excluding restructuring costs and other non-operating expenses.

Last year, the company changed its pricing model as it introduced organizer fees. However, this impacted creator acquisition and retention, thereby hampering event inventory and ticket volume. To overcome these challenges, the management has planned material adjustments to its pricing plans. Eventbrite plans to reintroduce a free tier and transition to a paid tiering system that charges for enhanced visibility and value-added services. These changes are expected to better align Eventbrite's value proposition with that of its creators. Eventbrite will implement these changes in September 2024, and the process is anticipated to be swift. By virtue of these factors, and to capitalize on the dip in its stock price, investors can consider adding Eventbrite to their portfolios.

Risks and Assumptions related to Back-tested trading strategies
The risks and assumptions listed here are not intended to be an exhaustive summary of all the risks and assumptions involved.
The strategy might suffer from look-ahead bias which occurs due to the use of information or data in a study or simulation that would not have been known or available during the period being analyzed. This can lead to inaccurate results in the study or simulation.
Future price movements may not be exactly the same as the historical price movements and this could lead to variation in performance.
Testing can sometimes lead to over-optimization. This is a condition where performance results are tuned so high to the past they are no longer as accurate in the future.
The model assumes no slippages in trading. Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed.
The back-tested strategy might be at risk of data dredging, which is the behavior of testing multiple hypotheses at one time, resulting in picking the data that best supports your main hypothesis.
Drawdowns in actual trading can be higher than the tested system and losses could be significant in the event of leverage.
Unforeseen events can lead to variation in performance from the tested trading strategy.
The tested result has been computed with price feeds available from Bloomberg.
The testing environment has not considered transaction or any other costs.
Trading indicators used for the purpose of testing has been provided by Bloomberg.
The strategy might suffer from data mining fallacy, selection bias and backfill bias.
A trading strategy that performs well on multiple datasets from one market (e.g., forex) might not perform as well in another market (e.g., stocks).
The strategy may not depict accuracy in terms of spread changes due to the spread-widening events.

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