Madison Square Garden Analyst Predicts 30% Upside To Stock, Healthy Capital Returns

Madison Square Garden Entertainment Corp MSGE Monday reported upbeat earnings but disappointing sales for its fiscal fourth quarter.

The New York-based company’s strong free cash flows provide the opportunity for “healthy capital returns or de-levering in the years ahead, according to BofA Securities.

The Analyst: Peter Henderson initiated coverage of MSG with a Buy rating and a price target of $41.

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The Entertainment Thesis: Strong trends in the live entertainment segment could enable the company to achieve “mid-single digit revenue and low-double digit adjusted operating income (AOI) annualized growth from FY2023- FY2027E,” Henderson wrote.

“We believe [MSG] can successfully achieve its goals of improving venue utilization, driving more premium hospitality, and increasing sponsorship by monetizing new verticals including insurance,” the analyst wrote.

MSG has the opportunity to increase ticket sales for its owned Christmas Spectacular production, he added.

Following the spinoff from Sphere Entertainment Co SPHR, MSG now presents “an attractive opportunity to own a growth-oriented, pure-play live entertainment company,” Henderson further stated.

MSGE Price Action: MSG shares had risen by 1.36% to $31.41 at the time of publication Tuesday.

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