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S&P International Scores has downgraded its Stay Nation outlook because the promoter faces a DOJ antitrust lawsuit. Picture Credit score: S&P
S&P International Scores has downgraded Stay Nation’s outlook to unfavourable because the Ticketmaster mum or dad grapples with a DOJ antitrust motion.
The S&P International subsidiary only recently up to date its Stay Nation outlook, days following the official submitting of the Justice Division’s long-anticipated antitrust criticism. We’ve already covered that greater than 120-page swimsuit – and Stay Nation’s retort – intimately.
Concerning brass-tacks takeaways, nevertheless, the federal authorities is seeking to compel Stay Nation to divest Ticketmaster over the mixed operation’s alleged market-power abuses and ensuing client hurt.
In fact, solely time will inform how the state of affairs unfolds – some extent readily acknowledged by S&P, which particularly famous the motion’s “unsure” impact “on the corporate and dwell occasions business.” However, “Stay Nation’s working efficiency might be damage by the lawsuit,” based on the textual content.
And it’s because of this that the credit standing company has shifted from a steady to unfavourable outlook for Stay Nation, with the entity’s Stay Nation administration and governance rating adjusted from impartial to reasonably unfavourable.
“The unfavourable outlook displays our view that the heightened regulatory scrutiny, monetary prices, and potential disruption of Stay Nation’s aggressive place within the dwell occasions business from the antitrust lawsuit may impair the corporate’s creditworthiness and thereby probably end in a decrease ranking,” S&P International Scores wrote.
“We imagine Stay Nation advantages from economies of scale and vertical integration within the dwell occasions business and that Ticketmaster is a core part of its aggressive benefit,” the company elaborated. “Due to this fact, we view the lawsuit as a major menace to the enterprise.”
Then again, although, the S&P International unit affirmed “all” its Stay Nation credit score rankings, together with a BB- issuer ranking, a BB ranking on senior secured debt, and a B+ ranking on unsecured debt, per the breakdown.
However the company’s considerations and the opposite hurdles Stay Nation is dealing with – chief amongst them a reported Ticketmaster hack and related class action litigation – the broader market seems unfazed by the DOJ swimsuit.
On the time of writing, Stay Nation inventory (NYSE: LYV) was hovering over $93.50 per share – down solely barely on the week, up modestly from 2024’s begin, and 17 p.c above its worth in late Could of 2023.
On the rankings entrance, Roth MKM analyst Eric Handler not too long ago maintained a purchase ranking, with a $120 goal worth, for LYV. Contrasting S&P International Scores’ evaluation of the Justice Division motion, the previous Goldman fairness analysis analyst Handler expressed the idea {that a} Stay Nation-Ticketmaster cut up “may have issue in succeeding.”
“The corporate intends to vigorously battle this lawsuit and believes it has acted in accordance with its consent decree. It’s prepared to debate sure cures, which we don’t anticipate to be transformative for the enterprise,” communicated Handler, indicating additionally that allegations “of monopolistic and anti-competitive behaviors appear powerful to show.”
