UPDATE: Morgan Stanley Reiterates On Madison Square Garden On Continued Upside

In a report published Wednesday, Morgan Stanley analyst Ryan Fiftal reiterated an Overweight rating on The Madison Square Garden Co. MSG, and raised the price target from $62.00 to $65.00. In the report, Morgan Stanley noted, “MSG trades in-line with cable network peers and our broader media/ent. comps on forward EBITDA, despite (1) higher-end growth in our base case forecast and (2) more durable, in our view lower-risk, content assets. "We believe the stock trades inline with peers due to market fears of value-destructive M&A, overly bearish in our view. We see EBITDA upside in all three segments: Sports due to potentially lower payroll as the Knicks rebuild; Media – we believe our ~6% p.a. affiliate fee growth forecast is conservative; and Entertainment – EBITDA running below prior peak with upcoming benefits from running the Garden year-round and opening the LA Forum. In light of increased content investment and rising competition for affiliate fee dollars, networks with must-carry content are best positioned. While MSG lacks potential upside from monetizing new online platforms, we see less downside risk for its core content/audience given its team ownership.” Madison Square Garden closed on Tuesday at $60.76.