Market Overview

Analyst Sees A Slam Dunk For Madison Square Garden, Upgrades To Buy


In a report published Monday, analysts at Stifel upgraded The Madison Square Garden Co (NASDAQ: MSG) from Hold to Buy. The price target was set to $100. The analysts expect the company's 3Q15 earnings announcement to have a positive impact on its stock valuation.

"Previously we had assumed that the RSN entity would be leverageable but continue to return capital. Post the call, it is clear that leverage will be much higher than we anticipated," the analysts said.

Stifel believes that while the RSN division might limit capital return, it would drive robust shareholder value in the near future via de-leveraging. Although there is no information regarding the company undertaking any M&A activity at present, the analysts expect an M&A transaction in the near term, with other regional RSNs in NY.

"Given the FCF profile of the asset and the M&A potential, we view the greater than expected leverage on the asset as positive for shareholders," the analysts added, while saying that capital return at the Sports/Entertainment segment is expected to drive strong FCF in calendar 2016.

Latest Ratings for MSG

Apr 2020Morgan StanleyMaintainsEqual-Weight
Apr 2020Imperial CapitalMaintainsOutperform
Mar 2020Imperial CapitalMaintainsOutperform

View More Analyst Ratings for MSG
View the Latest Analyst Ratings


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Posted-In: StifelAnalyst Color Upgrades Analyst Ratings

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