Analysts’ Positive Outlook Helps Sphere Entertainment Rebound

Posted on: December 6, 2023, 03:16h.

Last updated on: December 6, 2023, 03:16h.

Sphere Entertainment’s stock (NYSE: SPHR) soared after the company predicted positive adjusted operating income (AOI) for the fiscal second quarter, surprising the market. The announcement comes from Sphere Entertainment after analysts reported that fans have shown enthusiasm for the Sphere music venue.

Las Vegas Strip casino gaming revenue
Analysts are growing bullish on Sphere Entertainment shares. (Image: Las Vegas Review-Journal)

Macquarie’s analyst Paul Golding has raised the price target for Sphere Entertainment’s stock, stating that U2 and Postcard from Earth shows yielded millions in revenue and are expected to influence the operator’s future earnings.

According to the analyst, the U2 shows have generated $30.7 million in total revenue since the venue’s grand opening.

Shares Surge

As the news circulated, Sphere’s shares traded 8.34% higher on significantly increased volume.

Sphere Entertainment Issues Convertible Debt

The company announced plans to sell $225 million worth of convertible debt to support its growth initiatives. The move indicates a shift toward greater equity-like traits.

According to Golding, capital may be necessary to expand to other locations and could lead to profitable ventures.

Growing Opportunities

Separately, the NHL announced that it will hold its 2024 draft at the Sphere. The league’s affiliation with the Golden Knights is boosting enthusiasm for the event and the venue.

Analysts Share Bullish Outlook

Golding and Guggenheim’s Curry Baker have upbeat views on Sphere’s future. Golding remains optimistic about the company’s future earnings and Baker raised his rating on Sphere’s stock, noting potential upside for shareholders.

If SPHR walks away from the money-losing regional sports network business, there is potential for an additional $7 per share.

With plans in place for significant changes at the Sphere, the company’s stock is likely to grow consistently in the future.

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