Although the company's business model provides protection from secular issues, the brokerage said shares trade at a 35 percent discount to asset value.
"[W]e do not foresee that gap narrowing further. We have been bullish on monetization of the air rights, but that appears to be taking longer than expected," analyst John Janedis wrote in a note.
"With the NBA's new nat'l TV rights deal is kicking in this year, the Knicks' nat'l and local deals are both locked up for the long term," Janedis said, adding that "margins appear range bound to the high teens with possible downside should the Knicks become luxury-tax payers once again."
Meanwhile, the company "has an opportunity to increase the profitability of its Ent Segment through the expansion of the NY Spectacular" despite margin pressures.
"However, with an uncertain timetable for profitability and soft YR1 performance, our expectations remain tempered in the NT," Janedis added.
At time of writing, shares of MSG fell 2.82 percent to $178.99. Janedis has a price target of $185 on the stock.
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