The delta variant is a threat to these stocks

Live Nation said that June was Ticketmaster's fourth best month ever in North America. The Black Crowes here perform onstage on July 20, in Nashville, Tennessee. (Jason Kempin/Getty Images for Live Nation)

(CNN) — If you’re a company that manages ticket sales for concerts and other live events, it makes sense that after a long 18 months, you’d be getting excited about the future.

“Momentum for the return of live has been building every month,” Live Nation CEO Michael Rapino said after the company reported earnings Tuesday. “Looking forward to 2022 and now 2023, all our leading indicators continue to point to a roaring era for concerts and other live events.”

There’s no denying that the strong desire for a return to normalcy is there, feeding demand for travel and entertainment. But as the delta variant courses through the United States, Wall Street faces a tough question: Is the recovery really going to play out as companies have expected?

A spate of companies considered “recovery stocks” have reported results this week — and what they’re disclosing is promising.

Live Nation said that June was Ticketmaster’s fourth best month ever in North America, and that more concerts were put on sale in the United States than ever before. Shares are up 4% in premarket trading.

Lyft achieved its profitability goal a quarter ahead of target as revenue rose 26% quarter-over-quarter and 125% year-over-year. The company said that active riders jumped by 3.6 million compared to the previous period as old customers returned and new ones signed up. Its stock is up 1% in premarket trading.

And Caesars Entertainment, which owns brands like Caesars Palace, touted the comeback of Las Vegas, where it said occupancy at its properties was at 89%. Chief Operating Officer Anthony Carano said the company is “encouraged by booking trends for the second half of ’21 and into 2022.” Shares are up 3% in premarket trading.

But executives are admitting that the spread of the delta variant poses a risk.

“I want to remind investors that while declining COVID case counts in [the second quarter] fueled a rebound in our business, the pandemic is not yet over, especially with emerging variants and a return of restrictions in certain markets,” Lyft Chief Financial Officer Brian Roberts told clients. “We are cautiously keeping an eye on new developments and expect continued volatility and variability among cities. Future conditions can change rapidly and may impact our outlook.”

New York City announced Wednesday that it would require vaccines for entry to restaurants and gyms, while Las Vegas is back under a mask mandate.

Caesars Entertainment CEO Tom Reeg said he’s still bullish.

“What’s going on now with the mask mandate is far less onerous in terms of restrictions that we have dealt with in the last quarter,” he said.

Still, these stocks may start to be a tougher sell, depending on how the situation develops. Caesars’ stock is up almost 17% year-to-date, but has dropped 6% in the past week and 15% in the last month.


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