{"id":302029,"date":"2023-12-06T15:16:13","date_gmt":"2023-12-06T21:16:13","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=302029"},"modified":"2023-12-09T13:16:53","modified_gmt":"2023-12-09T19:16:53","slug":"sphere-entertainment-rebounds-as-analysts-praise-outlook","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/","title":{"rendered":"Sphere Entertainment Earns Price Target Lift as Profitability Emerges"},"content":{"rendered":"

After plunging Tuesday, shares of Sphere Entertainment (NYSE: SPHR) rallied Wednesday after the company forecast positive adjusted operating income (AOI) for its fiscal second quarter, an impressive feat when considering Wall Street was expecting a loss.<\/p>\n

\"Las
Fans wait outside the Sphere during the immersive music venue’s opening night on Sept. 29, 2023. Analysts are growing bullish on Sphere Entertainment shares. (Image: Las Vegas Review-Journal<\/em>)<\/figcaption><\/figure>\n

Sphere detailed the profitability expectations in an 8-K filing with the Securities and Exchange Commission (SEC), stoking some positive commentary from analysts who cover the newly public company. In a note to clients on Wednesday, Macquarie analyst Paul Golding boosted his price target on the stock by 6% to $34. That implies upside of 19.6% from the December 5 close. The analyst noted the initial run of U2 shows at the Sphere<\/a> is proving beneficial to the operator.<\/p>\n

The 17 U2 shows (largely sold out) through November 30 and since the venue’s grand opening have driven $30.7m in total revenue, or ~$1.8m per show,\u201d wrote the analyst. \u201cPostcard from Earth has held 111 showings since debut and through November 30, running ~3x\/day, yielding ~$44.5m in ticket revenues, or ~$400k per seating. Management noted ticket sales momentum continued into November, with average daily ticket revenue above $1m.\u201d<\/p><\/blockquote>\n

In late trading, shares of Sphere are higher by 8.34% on volume, which is 7.7x the daily average.<\/p>\n

Sphere Entertainment Issuing Convertible Debt<\/h2>\n

Sphere Entertainment also told investors it\u2019s selling $225 million of convertible debt<\/a> to finance \u201cSphere-related growth initiatives.\u201d<\/p>\n

\n

Convertible debt differs from traditional corporate bonds in that buyers of the former can eventually convert those bonds into shares of common equity of the issuing company. As such, these bonds have more equity-like traits than those in other corners of the fixed-income market. Sphere\u2019s convertibles were sold at a 3.5% interest rate and a conversion premium of 25% to Tuesday\u2019s closing price.<\/p>\n<\/div>\n

\u201cManagement has emphasized on prior calls that future venues would involve partners or be franchised,\u201d added Golding. \u201cWe believe this could indicate some progress on discussions, and think it is possible that capital may be needed for some \u2018skin in the game\u2019 on other locations.\u201d<\/p>\n

The analyst lifted his 2024 through 2026 AOI forecasts on Sphere to $57.3 million, $144.6 million, and $126 million, respectively, from a 2024 loss of $9.9 million and 2025 and 2026 profitability of $73.6 million and $109.7 million.<\/strong><\/p>\n

Separately, the NHL announced Tuesday that its 2024 draft will take place at the Sphere. The league has established ties to Las Vegas via the defending Stanley Cup champion Golden Knights.<\/p>\n

Other Analysts Bullish on Sphere<\/h2>\n

In addition to Macquarie\u2019s Golding, other analysts are warming to Sphere. Guggenheim\u2019s Curry Baker boosted his rating on the stock to \u201cbuy\u201d from \u201cneutral.\u201d He noted potential upside for the stock if the Dolan family, which controls Sphere, decides to move on from the money-losing regional sports networks (RSN) that fall under Sphere\u2019s corporate umbrella.<\/p>\n

We would also note there is another $7 [per share] of value if SPHR walks away from the underwater RSN (regional sports network) business. We assume management will be rational next year in evaluating the RSN options. More clarity on what the company intends to do with the RSN business will likely occur next Spring\/Summer,\u201d observed the Guggenheim analyst.<\/p><\/blockquote>\n

MSG Networks broadcast games for the New York Knicks<\/a> and New York Rangers, both controlled by the Dolans.<\/p>\n","protected":false},"excerpt":{"rendered":"

After plunging Tuesday, shares of Sphere Entertainment (NYSE: SPHR) rallied Wednesday after the company forecast positive adjusted operating income (AOI) for its fiscal second quarter, an impressive feat when considering Wall Street was expecting a loss. Sphere detailed the profitability expectations in an 8-K filing with the Securities and Exchange Commission (SEC), stoking some positive […]<\/p>\n","protected":false},"author":46,"featured_media":296669,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,81886],"tags":[81903,23],"acf":[],"yoast_head":"\nSphere Entertainment Rebounds As Analysts Praise Outlook<\/title>\n<meta name=\"description\" content=\"Sphere Entertainment rallies as analysts highlight strong outlook.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sphere Entertainment Rebounds As Analysts Praise Outlook\" \/>\n<meta property=\"og:description\" content=\"Sphere Entertainment rallies as analysts highlight strong outlook.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-12-06T21:16:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-12-09T19:16:53+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/11\/18269936_web1_SPHERE-OPENING-SEP29-23-0929dp_029.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"833\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/\",\"url\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/\",\"name\":\"Sphere Entertainment Rebounds As Analysts Praise Outlook\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/11\/18269936_web1_SPHERE-OPENING-SEP29-23-0929dp_029.jpg\",\"datePublished\":\"2023-12-06T21:16:13+00:00\",\"dateModified\":\"2023-12-09T19:16:53+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Sphere Entertainment rallies as analysts highlight strong outlook.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/sphere-entertainment-rebounds-as-analysts-praise-outlook\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/11\/18269936_web1_SPHERE-OPENING-SEP29-23-0929dp_029.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/11\/18269936_web1_SPHERE-OPENING-SEP29-23-0929dp_029.jpg\",\"width\":1200,\"height\":833,\"caption\":\"Fans wait outside the Sphere during the immersive music venue's opening night on Sept. 29, 2023. 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