MSG Entertainment stock rated Buy with focus on live events rebound and growth drivers By Investing.com

On Monday, Guggenheim analysts maintained their optimistic stance on Madison Square Garden Entertainment (NYSE:), reiterating a Buy rating and a $48.00 price target, representing significant upside from the current price of $33.25.

The firm has highlighted Madison Square Garden Entertainment as their Best Idea for the calendar year 2025, despite recent pressures on the stock’s performance.

According to InvestingPro data, shares of MSGE have seen a significant decline over the last three months, though the company maintains a “GOOD” overall financial health rating. The stock’s recent performance follows the company’s first-quarter earnings report for fiscal year 2025, which included revisions to guidance that were attributed to slate timing at The Garden.

Guggenheim believes that MSGE can still achieve near double-digit growth in adjusted operating income (AOI) for the fiscal year 2025, despite these temporary challenges.

The firm’s confidence in MSGE is backed by several key factors. Firstly, there are strong secular tailwinds supporting the live entertainment sector, which are expected to benefit MSGE as difficult comparative results from The Garden begin to improve in the third fiscal quarter. This optimism is supported by the company’s solid 12.81% revenue growth in the last twelve months.

Secondly, MSGE’s iconic assets, located in New York City—the United States’ largest media market—provide a strong foundation for the company’s value, contributing to its $1.15 billion market capitalization.

Additionally, Guggenheim points to MSGE’s continued stock repurchase activities as a positive indicator. The company has already completed a $25 million stock repurchase and is expected to continue these buybacks throughout the calendar year 2025. Lastly, there is ongoing potential related to developments around Penn Station, especially with the inauguration of President Trump set for January.

The Guggenheim report underscores the firm’s belief that despite the recent setbacks due to guidance revisions, the long-term outlook for Madison Square Garden Entertainment remains strong.

The combination of a favorable environment for live events, strategic asset location, shareholder-friendly actions, and potential real estate developments are all seen as catalysts for MSGE’s future performance.

InvestingPro subscribers have access to additional insights, including 6 more ProTips and a comprehensive Pro Research Report that provides deep-dive analysis of MSGE’s financial health, valuation metrics, and growth potential.

In other recent news, Madison Square Garden Entertainment Corp. announced a series of significant developments. Michael J. Grau, the company’s Executive Vice President and Chief Financial Officer, is set to depart on November 20, 2024, and will be succeeded by Lee Weinberg as the Interim Chief Financial Officer.

The company also reported mixed results in its Fiscal 2025 Q1 earnings call. Despite a slight dip in revenue to $138.7 million, primarily due to fewer concerts and events, the company hosted nearly 800,000 guests over 120 events, setting a record for concert bookings.

In anticipation of higher labor costs, MSG Entertainment is considering strategies such as dynamic pricing and self-service concession terminals. The company is also prioritizing debt repayment and shareholder capital returns.

On a positive note, the company expects a mid to high single-digit percentage increase in adjusted operating income for FY2025. Advanced sales for the Christmas Spectacular are up by 15% year-over-year.

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