Music Stocks
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Although most music stocks gained value this week, Spotify dropped 4.6% to $302.27 despite the U.S. markets surging to record heights and two new analyst reports that indicated the company’s share price has much room for improvement.
On Wednesday (July 10), KeyBanc increased Spotify’s price target from $400 to $410 on the belief that the market is underestimating the company’s revenue, earnings and gross margin for 2025 and 2026. In addition, Wolfe Research initiated coverage of Spotify with a $390 price target. Given Spotify’s closing price of $302.27 on Friday, KeyBanc’s new price target implies 35.6% upside while Wolfe’s price target implies 29% upside.
There was one Spotify dissenter this week, however. Redburn Atlantic downgraded Spotify to “sell” with a $230 price target — 23.9% below Friday’s closing price. While Redburn’s analysts are impressed with Spotify’s operating momentum, they believe the market “is simply forecasting too much growth,” they wrote in an investor note. In April, Spotify — which will release its second-quarter earnings on July 23 —said it expects second-quarter revenue to be 3.8 billion euros ($4.1 billion), which would be a 19.6% increase over the prior-year period. It also said it anticipated 245 million subscribers, up 11.4% year-over-year.
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Spotify also bucked the trend among all stocks, which enjoyed a record-setting week. The Dow Jones Industrial Average and S&P 500 reached all-time highs on Friday (July 12) while the Nasdaq composite hit a new peak on Thursday (July 11). After gaining 0.2% this week, the tech-heavy Nasdaq is up 22.6% in 2024, while the S&P 500 added 0.9% and has gained 17.7% year to date.
Spotify’s fall was a major factor in the Billboard Global Music Index (BGMI) dropping 0.9% to 1,828.20 this week, though a couple of other valuable stocks also played a role even as only six of the 20 stocks lost ground this week. The index’s second-most-valuable component, Universal Music Group, declined 2.2% to 27.40 euros ($29.92) while its sixth-most-valuable component, HYBE, fell 3.9% to 189,700 won ($137.95). Despite this week’s decline, the BGMI is up 19.2% in 2024, just shy of the Nasdaq and ahead of the S&P 500.
Among stocks that saw gains this week was Warner Music Group (WMG), whose share price improved 2.0% to $30.93. On Thursday, Jefferies lowered WMG’s price target to $38 from $43, which implies 22.9% upside over Friday’s closing price. On Friday, Wolfe Research initiated coverage of WMG with a $37 price target, which implies 19.6% upside. Meanwhile, Redburn downgraded WMG from “neutral” to “sell” and has a price target of $23, 25.6% below Friday’s closing price.
Sphere Entertainment Co. led all music stocks by gaining 16.6% to $43.66, bringing its year-to-date gain to 28.4%. On Thursday, Morgan Stanley boosted its price target to $45 from $42, which implies 3.1% upside from Friday’s closing price. The company’s shares got a boost two weeks ago after hedge fund titan Steve Cohen’s Point72 Asset Management took a 5.5% stake. Sphere’s sister company, MSG Entertainment, gained 8.0% to $37.21.
Leading all music stocks this week, SiriusXM shares rose as high as $4.14 on Friday (July 5), its highest point since March 13, and closed at $3.71, up 31.1%. The satellite radio company, which also owns music streaming service Pandora and has high hopes for its revamped SiriusXM streaming app, is likely benefitting from an upcoming 10-to-1 reverse stock split and merger with Liberty Media’s SiriusXM Group tracking stock. The merger eliminates any confusion amongst investors by creating only one way to invest in SiriusXM. And although the split doesn’t affect the company’s value, it will increase the share price by reducing the number of shares outstanding. That, in turn, could help SiriusXM’s image with investors and further help prop up the share price.
French streaming company Deezer rose 20.3% to 2.07 euros ($2.25) after it completed a public offering that transferred shares from the professional to the general segment of the Euronext Paris. (The professional segment is dedicated to companies that did not have an initial public offering or sale of shares. Deezer gained entry to the Euronext Paris through a merger with I2PO, a special purpose acquisition company, in 2022.) With that improvement, Deezer’s year-to-date loss improved to 12.3% from 19.2% a week ago. The company will report first-half earnings results on July 30.
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The Billboard Global Music Index (BGMI) rose 1.6% to 1,844.87, nearly matching the all-time record of 1,847.64 set the week ended May 17, with the large gains enjoyed by SiriusXM and Deezer helping offset losses by 11 of the index’s 20 stocks. The index’s most valuable companies had small gains this week: Live Nation rose 1.7% to $95.34, Universal Music Group added 0.9% to 28.03 euros ($30.41) and Spotify gained 0.8% to finish at $316.85.
Music stocks couldn’t match many major indexes this week. In the United States, the Nasdaq composite gained 3.5% to 18,352.76 and the S&P 500 rose 2.0% to 5,567.19 — both record closes. Stocks were aided by data released on Friday by the U.S. Labor Department that showed that the economy added more jobs than expected in June while the increase in hourly earnings met expectations. The rise in the unemployment rate rise from 4.0% to 4.1% was a surprise, however.
Internationally, the U.K.’s FTSE 100 improved 0.5% to 8,203.93. South Korea’s KOSPI composite index gained 2.3% to 2,862.23. China’s Shanghai Composite Index dropped 0.6% to 2,949.93.
Sphere Entertainment Co. improved 6.8% to $37.43, bringing its year-to-date gain to 10.1%. On Wednesday (July 3), the company announced it had given executive chairman/CEO James Dolan a new three-year employment contract that runs through June 30, 2027. That ensures Dolan will continue to oversee the growth of Sphere in Las Vegas and additional locations the company will target. Looking ahead, Dead & Company’s 30-show residency at the venue concludes on Aug. 10 while the Eagles will begin a 16-date residency — eight weekends of Friday and Saturday concerts — on Sept. 20.
Music streaming company LiveOne fell 14.6% to $1.34, putting the stock down 4.3% year to date. On Monday (July 1), the company announced a partnership with Seekr to build an AI-powered search engine for beats and sounds. The platform, expected to launch by the end of the year, is intended to help creators and music licensors.
Korean companies continued to struggle this week. HYBE fell 2.5% to 197,400 won ($143.30), bringing its year-to-date loss to 15.5%. SM Entertainment fell 3.5% to 77,600 won ($56.33) and has fallen 15.7% in 2024. Two K-pop companies not in the Billboard Global Music Index fared even worse: JYP Entertainment, home to TWICE and Stray Kids, dropped 2.8% to 55,700 won ($40.43) and has fallen 45% this year; while YG Entertainment, home to BLACKPINK and BABYMONSTER, sank 5.3% to 38,150 won ($27.69) and has lost 25% year to date.
Sphere Entertainment Co. stock gained 5.4% to $35.04 this week after Point72 Asset Management, the hedge fund of Wall Street giant Steve Cohen, took a 5.5% stake in the company, making it one of the best-performing companies on this week’s Billboard Global Music Index.
Cohen is the owner of the New York Mets professional baseball team. Sphere’s sister company, MSG Sports — James Dolan is CEO of both companies — owns two of the city’s major professional sports franchises, the New York Knicks basketball team and the New York Rangers hockey team. The Sphere venue in Las Vegas will host its first sports event Friday evening (June 28): the National Hockey League draft.
Elsewhere, radio companies Cumulus Media and iHeartMedia gained 9.1% and 9.0% this week, respectively, as radio stocks bested other publicly traded music companies on the Billboard Global Music Index. Both Cumulus and iHeartMedia clawed back nearly half of the losses they suffered in the previous two-week period. After dropping 21.1% from June 7 to June 21, Cumulus finished up at $2.04. Similarly, iHeartMedia had lost 21.1% in the prior two weeks and finished this week at $1.09. Townsquare Media, which is not in the Index, rose 9.2% to $10.93, turning its 5% year-to-date loss into a 3.7% gain.
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Many radio companies are still having a tough 2024, however, as they slog through a challenging advertising climate. Through June 28, iHeartRadio has fallen 59.2% and Cumulus is down 61.7%.
The Billboard Global Music Index was effectively unchanged from the previous week, rising less than one point to 1,815.54. The index’s year-to-date gain was also unchanged at 18.3%. Most of the stocks showed little movement as 16 of the 20 companies fell within the range of +2.1% to -3.4%. Even though 12 of the companies posted gains, the biggest winners are among the index’s smallest companies, and those winners were overcome by losses suffered by larger companies such as Spotify (down 1.1%), CTS Eventim (down 1.3%) and SiriusXM (down 3.4%).
Streaming stocks had the worst week of any sector after losing an average of 0.4%. The top streamer was Anghami, which rose 0.9% to $1.07. Cloud Music and Deezer each lost less than 1%. LiveOne fell 1.3% to $1.57.
Reservoir Media was the week’s greatest gainer after improving 11.9% — 9.6% on Friday alone — to $7.90. The gain came without major news or analyst commentary. The last analyst to increase a price target on Reservoir was B. Riley on May 31, the day after Reservoir announced that its full-year revenue increased 18% to $145 million.
K-pop companies all had modest increases this week. HYBE gained 1.3% to 202,500 won ($146.60). SM Entertainment, also a Billboard Global Music Index member, rose 1.1% to 80,400 won ($54.21). Elsewhere, JYP Entertainment jumped 2.1% to 57,300 won ($41.48) and YG Entertainment sank 1.0% to 40,300 won ($29.18). All four stocks have fallen sharply in 2024, however, with an average year-to-date decline of 22.6%.
Major stock indexes had mixed results this week. In the United States, the Nasdaq composite rose 0.2% to 17,732.60 and the S&P 500 fell 0.1% to 5,460.48. South Korea’s KOSPI composite index gained 0.5% to 2,797.82. In the United Kingdom, the FTSE 100 dropped 0.9%. China’s Shanghai Composite Index declined 1.0% to 2,967.40.
SiriusXM had its best week since December 2023 this week, leading all music stocks in a week when the losers outnumbered the winners two to one. Shares of the company jumped 12.3% to $2.93 following the company’s decision to conduct a 1-for-10 reverse stock split when it merges with the Liberty Media SiriusXM Group tracking stock later this year. SiriusXM gained 16.4% in the week ended Dec. 15, 2023.
The reverse split is meant to boost SiriusXM’s beleaguered share price. After years of steady growth in its satellite radio business, the company has suffered declines in both revenue and satellite subscribers as it attempts to build a competitive streaming service. The company lost 445,000 self-pay subscribers in 2023 — a 1% decline — and experienced a 1.4% drop in the first quarter of 2024. The revamped streaming app launched in December at $9.99 per month, about half the average revenue per user generated from satellite radio subscriptions in 2023.
SiriusXM was the only music stock to post a double-digit gain this week and one of only six stocks in the 20-company Billboard Global Music Index to see growth. With 13 stocks declining and one — French music company Believe — unchanged, the index fell 0.3% to 1,814.88. On average, live music stocks fared the best with an average gain of 0.6%. Other segments posted declines: streaming stocks fell 3.7%, radio stocks dropped 2.9%, and record labels and publishers dipped 1.3%.
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Live Nation rose 4.7% to $92.96, its highest closing price since June 5. The company’s shares are down 8.3% since the Department of Justice brought an antitrust lawsuit that seeks to break up its concert promotion and ticketing operations, but it’s held steady since an initial post-lawsuit drop. Friday’s closing price was just 52 cents below the price the day after the lawsuit was announced on May 23.
Shares of Spotify rose 1.5% to $317.86 to mark their third successive weekly gain. Cost-cutting and price-hiking have helped Spotify’s stock gain 69.2% in 2024 and 101.8% in the last 52 weeks. There was more price-related news on Friday (June 21) as Spotify revealed a new “basic” plan in the United States, which costs $10.99 per month and offers users a plan that doesn’t include audiobooks. The “premium individual” plan includes both music and 15 hours of audiobook listening for $11.99 per month, while the “audiobook access” tier provides 15 hours of audiobook listening and the ad-supported music service for $9.99 per month.
iHeartMedia was the index’s worst performer after dropping 17.4% to $1.00. The radio giant’s stock is down 62.5% year to date amidst a weak radio advertising market and steady growth at competing streaming services. LiveOne fell 12.6% to $1.59, bringing its year-to-date gain to 13.6%.
Music was outperformed by broader indexes as stocks reached new highs this week. On Thursday (June 20), the S&P 500 set a new all-time high of 5,503.53 and the Nasdaq composite reached a new high of 17,936.79. For the week, the S&P 500 rose 0.6% to 5,464.62 and the Nasdaq composite was barely above breakeven at 17,689.36. In the United Kingdom, the FTSE 100 rose 1.1% to 8,237.72. South Korea’s KOSPI composite index gained 0.9% to 2,784.26. China’s Shanghai Composite Index fell 1.1% to 2,998.14.
Sirius XM Holdings announced a 1-for-10 reverse stock split for its shareholders when it merges with Liberty Media’s SiriusXM Group tracking stock later this year, sending the streaming and satellite radio company’s stock up 4.5% on Tuesday (June 18). The stock split, which was announced in a filing on Sunday (June 16), is meant to […]
The consortium acquiring French music company Believe has acquired 85.04% of share capital and 73.27% of voting rights in a tender offer that ends Friday (June 21). Believe owns digital distributor TuneCore, publishing administration service Sentric and such record labels as Naive, Nuclear Blast and Groove Attack. The bidding company is a consortium led by […]
Warner Music Group shares rose 6.6% to $31.47 this week, narrowing the stock’s year-to-date loss to 12.1%. Other gainers in the record label and music publisher space were HYBE, up 1.8% to 200,500 won ($144.95), and Universal Music Group, up 1.4% to 28.63 euros ($30.67).
Streaming companies had the best week, however. Led by LiveOne’s 6.4% gain, music streaming stocks had an average gain of 0.3% — versus an average 0.3% decline for record labels and publishers. Elsewhere, Tencent Music Entertainment gained 5.2% to $14.80 and Spotify added 1.6% to $313.02. The three companies also boast three of the top four year-to-date performances: Live One is up 30.0%, Tencent Music is up 64.3% and Spotify is up 66.6%. The fourth company in that equation is Hipgnosis Songs Fund, which is up 41.4% due to its upcoming acquisition by Blackstone.
Despite overall strength among streaming companies, three of them posted losses. Cloud Music fell 2.4% to 103.00 HKD ($13.19), lowering its year-to-date gain to 14.8%. Anghami lost 2.8% to $1.03, putting the stock’s year-to-date loss at 1.0%. And Deezer stumbled 6.1% to 1.86 euros ($1.99), bringing its year-to-date loss to 12.7%.
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The 20-company Billboard Global Music Index rose 1.1% to 1,820.01, bringing its year-to-date gain to 18.7% and its 52-week improvement to 36.5%. Although the index mustered a small gain, 11 of its 20 stocks lost value compared to seven gainers and two that were unchanged.
While overall music stocks managed only a small increase, the Nasdaq composite rose 3.2% to 17,688.88 and enjoyed its fifth-straight closing record on Friday (June 14). Th eS&P 500 improved 1.6% to 5,431.60. South Korea’s KOSPI composite index gained 1.3% to 2,758.42. On the losing side, China’s Shanghai Composite Index dropped 0.6% to 3,032.63 and the United Kingdom’s FTSE 100 fell 1.2% to 8,146.86.
The Billboard Global Music Index is outperforming these major indexes in 2024, however. Through June 14, the Nasdaq is up 17.8% and the S&P 500 is up 13.9%. Indexes in other countries have managed smaller gains. The FTSE is up 5.3%, the KOSPI composite index is up 3.9% and the Shanghai Composite Index is up 1.9%.
LiveOne shares improved 6.4% to $1.82 after the company announced it had surpassed 3.8 million total members, a 25% year-over-year increase, while Tesla memberships rose to 1.8 million, up 32% year-over-year (nearly all new Tesla vehicles sold in the United States come with a paid membership to LiveOne’s Slacker Radio). “Our goal is to forge meaningful alliances with companies that share our passion for innovation, bespoke programming, and delivering exceptional customer value,” Brad Konkol, head of Slacker Radio, said in a statement.
Live Nation shares fell 2.0% to $88.75 as the company continued to lose ground in the wake of the Department of Justice’s lawsuit seeking to break up the company’s concert promotion and ticketing businesses. CFRA Research lowered its Live Nation price target to $98 from $105 on Wednesday (June 12). Although its earnings-per-share estimates were unchanged, CFRA opted for a more conservative valuation multiple to reflect “business risk from the DOJ and live entertainment moving to the slower part of the year starting in October,” analyst Kenneth Leon wrote.
The Billboard Global Music Index’s biggest loss of the week came from Cumulus Media, which fell 18.1% to $1.94. The Atlanta-based radio company’s shares are down 63.5% year to date. Fellow radio company iHeartMedia dropped 3.2% to $1.21 this week, bringing its year-to-date loss to 54.7%.
Spotify’s stock price rose 3.9% this week after the company’s announcement of a U.S. price increase on Monday (June 3) sent the stock on a roller-coaster ride. Shares rose to a new 52-week high of $331.08 on Wednesday — its highest point since Feb. 25, 2021 — before closing at $308.11 on Friday (June 7).
After raising subscription prices in the United States and many other major markets in July 2023, Spotify further hiked rates in the United Kingdom and Australia in May. The additional U.S. price increase, which goes into effect in July, will raise individual rates to $11.99 per month and family plans to $19.99 per month. The higher prices will help Spotify cover the costs of bundling music with limited free streaming of audiobooks. The streamer is giving its customers plenty of options, though. A music-only tier has been introduced in the United Kingdom that costs 10.99 pounds ($13.99) per month, compared to 11.99 pounds ($15.26) per month for the music-and-audiobook option. Two-person Duo plans and student plans also offer discounts to the standard individual plan.
The Billboard Global Music Index rose 0.1% to 1,801.44 as Spotify’s gain helped overshadow losses by 13 of the index’s 20 companies. Other of the index’s largest companies posted modest declines this week: Warner Music Group fell 0.9% to $29.51, Universal Music Group fell 1.2% to 28.23 euros ($30.53) and Live Nation dropped 3.4% to $90.56. The index is 2.5% below its high of 1,847.64, set the week ended May 3, 2024.
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iHeartMedia, the index’s greatest gainer for the second consecutive week, rose 35% to $1.25 a week after gaining 6.4%. In just two weeks, iHeartMedia’s year-to-date loss has improved from 67.4% to 53.2% without any major news releases or regulatory filings. At the company’s annual general meeting on Wednesday (June 5), shareholders reelected CEO Bob Pittman and CFO/COO Rich Bressler to the board of directors and approved an advisory vote on the company’s 2023 executive compensation.
SM Entertainment dropped 8.5% to 83,500 won ($60.51) amidst controversy over an alleged sex scandal involving Johnny and Haechan of the group NCT, which SM Entertainment has denied. Such a large drop isn’t uncommon when a K-pop company’s artists are plastered across the South Korean news. In October, K-pop stocks dropped on news that SM Entertainment artist Exo was leaving for a different agency. In April, HYBE shares fell sharply after news broke that Min Hee-jin, CEO of HYBE imprint ADOR, had attempted to take over management of the subsidiary label.
Elsewhere, CTS Eventim rose 4.3% to 82.80 euros ($89.56). On Thursday (June 6), the German concert promoter and ticketing company finalized a $327 million acquisition of Vivendi’s festival and ticketing businesses. Last year, See Tickets sold 44 million tickets and had revenue of 105 million euros ($114 million). The deal does not include See Tickets France.
SiriusXM shares fell 9.5% to $2.56 this week, bringing its year-to-date loss to 53.2%. The satellite radio company, which also owns streaming platform Pandora, is betting on the success of the new streaming app it launched in December and its $9.99-per-month price. The in-car satellite product, which includes streaming access, costs “about $19” per month, CEO Jennifer Witz said at the J.P. Morgan Global Technology, Media and Communications Conference Conference on May 21. The company is attempting to maintain those satellite customers while attracting new streaming customers and reducing its reliance on promotional discounts. “I do think we’ll have opportunities to both capture more demand but also maintain that full price base at those higher price points and implement rate increases over time,” said Witz.
Some U.S. stock indexes reached all-time highs this week. The S&P 500 hit a record 5,375.08 Friday, although it closed at 5,346.99, down 0.1%. The tech-heavy Nasdaq composite reached a new high of 17,235.73 on Thursday and ended Friday at 17,133.12, up 2.4% from the prior week. In the United Kingdom, the FTSE 100 declined 0.4% to 8,245.37. South Korea’s KOSPI composite index rose 3.3% to 2,722.67. China’s Shanghai Composite Index lost 1.2% to 3,051.28.
Shares of Spotify rose as high as $317.00, up 6.8% from the previous day’s closing price, after the company announced Monday (June 3) that it will raise subscription prices in the United States. The stock closed on Monday at $310.80, up 4.7%, bringing its year-to-date gain to 65.4%. Price increases have done wonders for Spotify’s […]
Live Nation’s share price has proven to be resilient following the U.S. Department of Justice’s lawsuit and effort to break up the company’s concert promotion and ticketing operations. Eight days into what is likely to be a multi-year journey through the court system, shares of Live Nation dropped 2.3% to $93.74 and have held steady after an initial drop the day of the DOJ’s announcement.
Live Nation shares closed at $101.40 on May 22, the day before the DOJ announced its lawsuit, and dropped 7.8% to $93.48 when the news broke the following day. Since the announcement, however, Live Nation shares are up 0.3%. Still, amidst the uncertainty surrounding the outcome of the lawsuit, Live Nation’s year-to-date gain has been pared to just 0.1%, while its 52-week gain has been reduced to 13.2%.
Regardless of the outcome, the mere existence of a protracted legal battle is enough to exert a drag on the stock. In lowering their price target for Live Nation to $116 from $126 this week, J.P. Morgan analysts said in a Wednesday (May 29) note to investors they doubt the DOJ will succeed in breaking up the company and its Ticketmaster ticketing arm, but noted the effect of a “sentiment overhang.” J.P. Morgan maintains its “overweight” rating on Live Nation and analysts “believe that continued execution on [adjusted operating income] growth should drive shares higher, with significant valuation upside should developments in the lawsuit break positive.”
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Music stocks were broadly down this week as the biggest companies in the Billboard Global Music Index lost ground. The index fell 2.3% to 1,799.07 as Spotify fell 3.8% to $296.53, Universal Music Group dropped 0.9% to 28.58 euros ($31.03), Warner Music Group sank 2.2% to $29.78 and HYBE dipped 0.2% to 200,000 won ($144.60). Ten of the 20 companies in the index were losers this week, nine gained ground and one was unchanged.
The index has gained 17.9% year-to-date on the strength of music streaming companies. Tencent Music Entertainment and Spotify lead all stocks with gains of 60.4% and 57.8%, respectively, through the end of May. Elsewhere, Hipgnosis Songs Fund has gained 39.7% due to the company’s pending sale to Blackstone, German concert promoter CTS Eventim is up 26.8% and Chinese music streamer Cloud Music has gained 22.7%.
Radio company iHeartMedia has the distinction of being the top-performing music stock of the week while carrying the worst year-to-date performance. Shares of the radio giant rose 6.4% to $0.926, marking a respite from a month-long free fall during which the stock has traded below $1.00 per share over the last seven trading days. Even after this week’s gain, iHeartMedia finished the month of May down 56% and has lost 65.3% year to date.
Reservoir Media shares gained 2.4% to $8.04 this week following the company’s fiscal fourth-quarter earnings release on Thursday (May 30). The company beat guidance for both revenue and adjusted EBITDA and its share price rose as much as 15.5% in the wake of the news. Following the earnings results, B Riley raised its price target for Reservoir to $11.50.
Music streaming company LiveOne fell 6.3% to $1.65 this week after fiscal year results on Thursday showed the company’s revenue grew 19% to $118.4 million. LiveOne shares are up 17.9% year to date.
Overall stocks were broadly down this week but performed better than the Billboard Global Music Index. In the United States, the S&P 500 dropped 0.5% to 5,277.51 and the Nasdaq composite fell 1.1% to 16,735.02. In the United Kingdom, the FTSE 100 fell 0.5% to 8,275.38. South Korea’s KOSPI composite index sank 1.9% to 2,636.52. China’s Shanghai Composite Index declined just 0.1% to 3,086.81.