Proactive Investors - Madison Square (NYSE:SQ) Garden Entertainment is a live entertainment pure play with upside, according to analysts at Bank of America (NYSE:BAC).
The firm initiated coverage of MSGE, which owns Madison Square Garden along with other venues including the Chicago Theater, with a Buy rating and a 12-month $41 price target.
As of Tuesday afternoon, shares of the company traded 4.8% higher at $32.47.
BoA analysts called the stock “an attractive opportunity to own a growth-oriented, pure-play live entertainment company,” citing “structural live entertainment tailwinds.”
“MSGE's solid market position — #1 grossing venue of its size in the world, located in the #1 [designated market area] in the US — should help it benefit from the boom in live music/entertainment events,” analysts wrote.
“We forecast mid-single digit revenue and low-double digit adjusted operating income (AOI) annualized growth from [fiscal 2023 through fiscal 2027] as MSGE benefits from robust live trends. We believe the company can successfully achieve its goals of improving venue utilization, driving more premium hospitality, and increasing sponsorship by monetizing new verticals including insurance.”
Then there are the arena license agreements between MSGE and the Knicks and Rangers professional sports teams, which are on a 35-year term that began in 2021. Cash payments on those deals rise 3% annually to 2055.