With earnings season just around the corner, K-pop companies were among the rare winners this week, with music stocks snapping a six-week winning streak.
YG Entertainment soared 6.1% this week as the company appeared to be enjoying success with “APT” by girl group BLACKPINK member ROSÉ with Bruno Mars. The song got off to a strong start this week, topping Spotify’s global and U.S. daily streaming charts and racking up 13.3 million streams in the U.S. in its first four days of release. SM Entertainment, which owns NCT 127 and RIIZE, rose 4.1%, while HYBE, which owns Seventeen and Tomorrow X Together, rose 2.1%. Shares of JYP Entertainment, the agency behind Stray Kids and ITZY, rose 1.4%.
Shares are likely to be volatile in the coming weeks as the company releases results for the quarter ended Sept. 30. Universal Music Group (October 31) and Cumulus Media (November 1). Other companies that have announced earnings release dates include Sony Corporation (November 8), Tencent Music Entertainment (November 12), Live Nation (November 12) and Spotify (November 12).
The 20-company Billboard Global Music Index (BGMI) fell 0.6% to 1,974.72 in the week ended October 25, after surpassing 2,000 points for the first time the previous week and recording gains in the previous five weeks. The BGMI hit 2,001.28 in the week ended October 18, more than doubling in value since the index was launched in February 2022. The Nasdaq (up 23.4%) and the S&P 500 (up 21.8%).
Stocks have been mixed this week. In the U.S., the S&P 500 rose 0.2% to 18,518.61, while the Nasdaq Composite fell 1.0% to 5,808.12, although Tesla shares rose 22 after the electric car maker beat profit estimates and raised its growth outlook. %. Britain’s FTSE 100 fell 1.6% to 8,248.84 points. South Korea’s KOSPI composite index fell 0.4% to 2,583.27. China’s Shanghai Composite Index rose 1.2% to 3,299.70.
Aside from Korean companies, one of the companies most affected this week is Live Nation. A number of analysts this week raised their price targets on the concert promoter’s stock ahead of the company’s Nov. 12 earnings report: Redburn Atlantic (to $126 from $118), Jefferies (to $132 from $113), JPMorgan Chase (from $118 to $137) and Goldman Sachs (from $128 to $132). Given that Q3 was the strongest period in Live Nation’s history and the company had set records in previous quarters, Q3 results are likely to set more all-time highs.
Spotify was one of the few stocks in the index to post weekly gains, albeit with a gain of just 0.1%. Morgan Stanley raised its price target on Spotify to $430 from $400 on Wednesday. Analysts believe Spotify has a lot of upside potential. Goldman Sachs analysts explained in an investor note on Tuesday (October 22) that global subscription penetration (excluding China) “remains relatively low” at 15%, and that Spotify has the ability to further increase prices. Additionally, they wrote, Spotify’s growing audiobook business proves that the company can generate more revenue from subscribers than it could if it only offered music.
Most music stocks posted modest single-digit losses for the week. Warner Music Group fell 0.1% to $32.38; Universal Music Group fell 1.9% to 23.61 euros; Tencent Music Entertainment fell 3.2% to $11.50; Reservoir Media fell 3.4% to $8.55; iHeartMedia fell 4.3% to 1.80 USD; Sphere Entertainment Co. fell 4.3% to $1.80. SiriusXM fell 4.4%.
LiveOne fell 10.6% to $0.58, its biggest drop of the week. Shares of the music streaming company have fallen 38% since announcing on October 1 that Tesla would no longer subsidize LiveOne-enabled streaming services in new cars. Shares in broadcaster Cumulus Media fell 9.4% to $1.16, and are down 78.2% year to date.
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