An analyst from Citi upgraded Live Nation’s stock (NYSE: LYV) forecast to “buy” Monday, but with it came qualifications that the company would take a huge hit if it were forced to split with Ticketmaster, as some are hoping will be done. Jason Bazinet lowered his price target for the stock to $82, but expressed confidence that the rumblings of politicians calling for the split wouldn’t actually bring meaningful action.

From SeekingAlpha.com:

“If the DoJ seeks to unwind the merger – and is successful – we believe: standalone Live Nation would fetch 13.5x EV-EBITDA; standalone Ticketmaster would fetch 8.0x EV-EBITDA; and the firm would incur $100 million of dis-synergies,” Bazinet wrote in a note to clients.

However, Bazinet added that he believes there is only a 20% likelihood that there is a break-up of the firm.

Live Nation Entertainment closed at $70.21 per share on Tuesday, up slightly from Monday’s opening price of $68.55. Those numbers are far off the company’s 52-week high of $126.79, as market headwinds and controversies have dragged the share price down despite soaring earnings built largely off the increased usage of dynamic “surge” ticket pricing schemes that inflate the consumer cost to attend events at moments of peak demand, which Ticketmaster systems like “Verified Fan” generate and exploit. The price suffered a precipitous drop during the Taylor Swift Eras Tour sale process, falling from the mid-$70’s range to about $10 less, though it has slowly recovered about half of that loss in the ensuing week.

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In his analysis, Bazinet said that he believes Live Nation to be valued at approximately $90/share, but a forced split would drop that to around $48/share. LYV has traded at above $50 for most of the previous five years, having dropped dramatically to a little more than $30/share in the immediate aftermath of the sudden halt on live events brought on by COVID-19 in March of 2020, but recovering to above $50 by the fall of that year and rising to all-time highs in late 2021 as reopening accelerated.

Indeed, the main thing that has reduced Live Nation’s stock price of late has been controversy and the specter of regulatory action taken against it. The all-time highs from the fall of 2021 were briefly brought down in the wake of the Astroworld tragedy, which caused intense media scrutiny on the promotional giant’s safety record through the years. There actually had been plans for a congressional hearing over that, but the initial date was postponed at the request of Live Nation, and simply never got rescheduled.

The more recent fiasco has drawn even more heat, with more than 30 members of congress signing on to a letter demanding action from the Department of Justice – which the New York Times reported already has an open competition investigation on the companies – and an announcement from Senators Amy Klobuchar (D-MN) and Mike Lee (R-UT) that the Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights would hold hearings on Ticketmaster and Live Nation and competition in the industry.

Despite that, bankers apparently are still confident that Rapino’s company will emerge intact from the fiasco, continuing its streak of receiving minimal penalties when found to be in violation of its consent decree or other legal matters.

It is perhaps worth noting that Citi itself has a multi-faceted relationship with both Live Nation Entertainment and Ticketmaster, with thousands of presale tickets held back at major events for Citi cardholders – a partnership that dates back to at least 2008.

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