TM Gets Mixed News

Ticketmaster Entertainment Inc.’s stock climbed Tuesday along with the broader market even as a Citi Investment Research analyst cut his price target due to curtailed consumer spending and increased competition from Live Nation Inc.

The overall market rose early on, as investors anticipated the Federal Reserve was likely to bring a key U.S. interest rate to the lowest level on record later this afternoon.

Meanwhile, Mark Mahaney of Citi Investment Research said ticketing service Ticketmaster Entertainment is having to battle tightened consumer pursestrings as the economic downturn drags on. Many people have pulled back on their discretionary spending this year in light of the ongoing housing slowdown, rising food costs, diminishing credit and unemployment worries.

Mahaney is also unsure if West Hollywood, Calif.-based Ticketmaster Entertainment will be able to escape competitive pressure from concert promoter Live Nation any time soon.

Live Nation has increasingly signed comprehensive rights deals with artists and is starting up its own ticketing operation in January.

“While we believe the addition of Front Line is a net positive for Ticketmaster’s competitive offering, we see few near-term catalysts for the stock and the Live Nation overhang will likely remain a material issue throughout 2009,” he wrote in a client note.

In October, Ticketmaster completed the purchase of a majority stake in talent agency Front Line Management Group Inc. for $123 million in cash and changed its name to Ticketmaster Entertainment. Ticketmaster had owned 46 percent of Front Line as of December 2007.

In addition, Ticketmaster Entertainment is likely to close out the year with about $665 million, or $11.75 per share, in net debt, according to Mahaney.

“While we are comfortable that the company has the cash flow strength to support this level of debt, the increased debt level does put pressure on the equity valuation in our view,” he said.

Mahaney lowered Ticketmaster’s price target to $6.50 from $9.

Shares of Ticketmaster added 15 cents, or 2.7 percent, to $5.74 in morning trading. The stock has traded between $3.33 and $27 over the past year.