Katya Kazakina, Bloomberg
Jul 25, 2017
Sotheby’s climbed to the highest price since going public in 1988, a sign of investor optimism about the art market’s recovery and management led by Chief Executive Officer Tad Smith. Shares of the New York-based auction house for art and collectibles touched $57.81 Tuesday, the highest since October 2007. Closing at that level would push Sotheby’s to the highest price since the company went public in 1988. Sotheby’s, which reports second-quarter earnings on Aug. 3, recently said its auction sales in the first half of the year rose 8 percent to $2.54 billion. Its top lot was an untitled painting of a skull by Jean-Michel Basquiat that soared to $110.5 million in May — the most for an artwork auctioned in 2017. “There’s been a momentum at the very high end of the market,” David Schick, lead retail analyst at Consumer Edge Research LLC, said in an interview. Rival Christie’s saw auction sales surge 29 percent to 2.2 billion pounds ($2.8 billion) during the first six months of 2017, as sales above 10 million pounds more than doubled. The Sotheby’s stock rally is also being fueled by investor confidence in Smith’s team, as well as the weaker U.S. dollar, according to Schick. Smith took over in March 2015 and Chief Financial Officer Michael Goss joined a year later. Sotheby shares have surged 43 percent this year through yesterday, compared to 10 percent for the S&P 500 index. The 273-year-old company “has gone from more old-fashioned to modern, including more information flow between business units and more rapid digital-media work,” Schick said. The company has been also buying back stock. Sidoti & Co. raised Sotheby’s price target to $62 a share, saying in a July 18 note to clients that the company is in the early stages of its recovery. Successful key auctions in the first half of 2017 “will spur increased confidence among consignors” and drive sales that lift 2018 earnings, according to analyst Greg Pendy.
