Analyst Benjamin Swinburne from Morgan Stanley maintained a Hold rating on Sphere Entertainment (SPHR – Research Report) and decreased the price target to $32.00 from $45.00.
Benjamin Swinburne has given his Hold rating due to a combination of factors related to Sphere Entertainment’s financial outlook and market conditions. The Las Vegas Sphere, a significant part of the company’s operations, is expected to generate only modest positive adjusted operating income and slightly negative EBITDA and free cash flow in the near term. This indicates a cautious financial performance, as the business is still in its early stages and the earnings outcomes remain uncertain, although the range of these outcomes is narrowing as the business matures.
Additionally, Swinburne has adjusted the price target for Sphere Entertainment from $45 to $32, reflecting a more conservative outlook on the company’s long-term EBITDA and the broader de-rating of live entertainment comparables. The potential for revenue growth is tied to the success of new projects, such as the immersive Wizard of Oz experience, but the overall forecast remains modestly negative in terms of free cash flow until 2029. These factors contribute to the Hold rating, suggesting that investors should maintain their current positions without expecting significant short-term gains.
According to TipRanks, Swinburne is a 5-star analyst with an average return of 11.8% and a 57.62% success rate. Swinburne covers the Communication Services sector, focusing on stocks such as Spotify, AT&T, and Paramount Global Class B.