Sphere Entertainment downgraded at Seaport Research following 43% rally

As previously reported, Seaport Research downgraded Sphere Entertainment to Neutral from Buy with no price target. With shares up 43% year-to-date and having surpassed the firm’s previous $45 price target, aided by sentiment following Chairman and CEO Jim Dolan’s market purchases, the firm thinks it is time the “shares take a breather” ahead of a period of a “potentially softer couple of quarters than have just been experienced,” the analyst tells investors. While the firm acknowledges “plenty” of long-term growth opportunity from layering on a franchise model internationally, it says that could take three to four-plus years to start monetizing, adding that it will become more constructive again once there is more clarity on greater sustainable capacity utilization.