Sotheby’s to See Small Impact From ‘Scream’: Pros

It was great theater, but ultimately the record price for Edvard Munch’s “The Scream” won’t do all that much for auction house Sotheby’s, two analysts told CNBC Thursday.

The Scream, Edvard Munch
The Scream, Edvard Munch

The auction of the one version of Munch’s iconic painting in private hands sold for $107 million, but with commission and other costs the price came to $119.9 million. That was part of a record $330.6 million evening for Sotheby’s Wednesday.

“It was a magical night” and the auction “was fun to watch,” said Williams Capital Group analyst Marc Riddick, who has a “prefer/hold” rating on the stock, with a price target of $34.50.

Still, the auction house is facing “very difficult” comparisons to the first half of last year, when the art market was “incredibly strong and very broad and diverse,” Riddick told CNBC’s “Squawk on the Street.”

“So while ‘The Scream’ [auction] is an incredible thing to watch, the overall art market is much healthier when you have more options and more lots with more diversity,” he said.

Oliver Chen, an analyst with Citi who is neutral on the stock, said the auction will only bring Sotheby’s an additional five cents to 10 cents in earnings per share in the second quarter. He said he is staying on the sidelines, however, because its aggregate auction revenue in the first quarter was down 30 percent and its fixed costs were up about 11 percent last year.

Art continues to be a great assetto hold in uncertain times, he said.

“The art market as an asset class is increasingly interesting as it is currency-neutral,” the analyst said. “The other factor is with inflation concerns, people are interested in rotating into art and diamonds” as a way to protect themselves, which he sees as a potential catalyst for Sotheby’s in the second half of the year.

But when it comes to Sotheby’s itself, Riddick said, “We’re looking for numbers for sales to be down in both the first and second quarter. Sales were down at Sotheby’s in the third and fourth quarter of last year and it’s just comping against incredibly strong numbers the art market has seen over the last couple of years.”

Additional News: Is Record ‘Scream’ Sale the Peak of the Art Market?

Additional Views: Are Art Funds the Right Way to Invest in Art?


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No disclosure information was available for either analyst.