Barron's Tout Sends Madison Square Garden (MSG) Shares Higher
Tweet
Share
E-mail
Get Alerts MSG Hot Sheet
Price: $237.22 --0%
Rating Summary:
15 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 9 | Down: 13 | New: 12
Rating Summary:
15 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 9 | Down: 13 | New: 12
Join SI Premium – FREE
Madison Square Garden (NYSE: MSG) is grabbing some investor attention Monday following a bullish report from Barron's over the weekend.
Though the company's name is most closely tied with the New York Knicks home arena, Barron's notes Madison Square Garden derives most gains from its media business, which is largely composed of two networks: MSG Networks and MSG Plus. Both of the networks broadcast sports. Madison Square Garden's media unit contributed about 48 percent to revs in 2010, and all of operating income over the same period.
Barron's is looking for Madison Square Garden to generate about $1.2 billion in sales for 2011, barring an NBA player strike. EPS could reach $1.08 per share, according to Barron's, while analysts are looking for EPS of $1.22 in FY12.
Madison Square Garden had EPS of $0.85 in 2010.
The two other Madison Square Garden divisions lost money in 2010. MSG Sports generated 32 percent of revenue, but lost $1.8 million and MSG Entertainment added 26 percent to sales, but lost $38.6 million. Sports suffered from higher player expenses and Entertainment took a hit from severe winter weather.
Madison Square Garden is also planning on spending a little more, recently increasing its construction-cost guidance from $850 million to about $977 million. Madison Square Garden claims to have enough cash flow to handle the boost. Barron's noted Madison Square Garden ended 2010 with $350 million of net cash on the books.
Looking at MSG from a sum-of-parts prospective, one analyst believes shares are worth $50 each. Madison Square Garden's WNBA team, the Liberty, are valued at about $1 billion. Air rights above the Garden are $250 million, the Media networks are valued at about $2.5 billion, and land leases amount to $250 million. Adding in cash and subtracting $400 million for the Garden renovation gives a number of $4.1 billion, or about $54 per share.
Risks to upside include the aforementioned NBA contract renewal, and continued loses in its Entertainment segment. Renovation could cut into live event revenue, and some fans, even the most die-hard, will rebel against ticket prices, which are expected to increase by an average of 49 percent next year.
Madison Square Garden shares are up 4.3 percent Monday morning.
Though the company's name is most closely tied with the New York Knicks home arena, Barron's notes Madison Square Garden derives most gains from its media business, which is largely composed of two networks: MSG Networks and MSG Plus. Both of the networks broadcast sports. Madison Square Garden's media unit contributed about 48 percent to revs in 2010, and all of operating income over the same period.
Barron's is looking for Madison Square Garden to generate about $1.2 billion in sales for 2011, barring an NBA player strike. EPS could reach $1.08 per share, according to Barron's, while analysts are looking for EPS of $1.22 in FY12.
Madison Square Garden had EPS of $0.85 in 2010.
The two other Madison Square Garden divisions lost money in 2010. MSG Sports generated 32 percent of revenue, but lost $1.8 million and MSG Entertainment added 26 percent to sales, but lost $38.6 million. Sports suffered from higher player expenses and Entertainment took a hit from severe winter weather.
Madison Square Garden is also planning on spending a little more, recently increasing its construction-cost guidance from $850 million to about $977 million. Madison Square Garden claims to have enough cash flow to handle the boost. Barron's noted Madison Square Garden ended 2010 with $350 million of net cash on the books.
Looking at MSG from a sum-of-parts prospective, one analyst believes shares are worth $50 each. Madison Square Garden's WNBA team, the Liberty, are valued at about $1 billion. Air rights above the Garden are $250 million, the Media networks are valued at about $2.5 billion, and land leases amount to $250 million. Adding in cash and subtracting $400 million for the Garden renovation gives a number of $4.1 billion, or about $54 per share.
Risks to upside include the aforementioned NBA contract renewal, and continued loses in its Entertainment segment. Renovation could cut into live event revenue, and some fans, even the most die-hard, will rebel against ticket prices, which are expected to increase by an average of 49 percent next year.
Madison Square Garden shares are up 4.3 percent Monday morning.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Datadog (DDOG) PT Raised to $315 at UBS
- Cintas (CTAS) PT Raised to $230 at UBS Following Q4 Results, Guidance
- TD Cowen Resumes Compass Diversified (CODI) at Buy
Create E-mail Alert Related Categories
Analyst Comments, Insiders' BlogRelated Entities
Barron'sSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
