Morgan Stanley analyst Benjamin Swinburne maintained a Hold rating on Sphere Entertainment (SPHR – Research Report) yesterday and set a price target of $45.00.
Benjamin Swinburne has given his Hold rating due to a combination of factors influencing Sphere Entertainment’s current and future performance. The Las Vegas Sphere segment has shown stronger than expected results in the December quarter, with anticipated improvements in earnings by 2025. However, there remains uncertainty about the long-term earnings potential of the Sphere business, which is still relatively new.
Additionally, while the company has secured a distribution deal for MSG Networks, the terms may pose challenges for future negotiations, particularly with lenders regarding a significant term loan. The expectation of revenue growth and more efficient operations in 2025 is promising, but the overall outlook is tempered by these uncertainties, leading to a Hold recommendation.