MSGS: Future 60% Discount To Private Market Value Will Narrow

Analysts have modestly reduced their price target on Madison Square Garden Sports to about $268, down roughly $2, citing a still sizable discount to the estimated private market value for the Knicks and Rangers, along with concerns about governance and the visibility of potential catalysts.

Analyst Commentary

Street views on Madison Square Garden Sports remain mixed, with valuation support from private market benchmarks offset by governance and liquidity concerns.

Bullish Takeaways

• Bullish analysts highlight that the Knicks and Rangers still trade at a sizable discount, estimated at around 60 percent, to combined private market value, which implies meaningful upside if that gap narrows.
• Recent sales of comparable marquee franchises, such as the Celtics and Lakers, reinforce confidence that underlying asset values are higher than what the current share price implies.
• The core business is viewed as capable of consistently generating modest cash flow while continuing to reinvest in operations, which supports a longer term value creation narrative.
• Some see the recent price target trim as largely mechanical, with the rating and core thesis intact. This suggests execution has not fundamentally deteriorated.

Bearish Takeaways

• Bearish analysts argue that the concentrated ownership structure, with management and related parties controlling a dominant share of voting rights, limits governance checks and could mute minority shareholder influence on strategic decisions.
• Limited public float and trading liquidity are seen as structural overhangs that can constrain institutional participation and keep the valuation discount in place for longer.
• Recent share price weakness following an offseason revenue miss, driven by lower league distributions, raises questions about earnings visibility and near term execution risk.
• The lack of clear, near term catalysts to unlock asset value, such as a strategic transaction or structural change, leads some to see the current risk and reward profile as fairly balanced rather than compelling.

What's in the News

• The company completed its long running share repurchase program announced in 2015, having bought back 2,018,458 shares, or 8.29 percent of shares outstanding, for a total of about $340.33 million, with no additional shares repurchased in the most recent quarter (Key Developments).
• Madison Square Garden Sports renewed a multi year marketing partnership with Piece of Cake Moving & Storage, which will retain its role as the Official Moving and Storage Partner of the New York Knicks, featuring prominent in arena branding, on court contests, GardenVision features, LED signage, and sweepstakes for fans (Key Developments).
• The New York Rangers named GAME 7 as their first ever jersey patch partner, launching in the 2025 26 centennial season, with GAME 7 branding on all game jerseys, related retail merchandise, a themed centennial night at The Garden, and collaborative content and merchandise drops across Rangers digital channels (Key Developments).

Valuation Changes

• Fair Value Estimate: Unchanged at approximately $264.50 per share, indicating no material shift in the base valuation view.
• Discount Rate: Risen slightly from about 9.66 percent to roughly 9.67 percent, reflecting a marginally higher required return.
• Revenue Growth: Essentially unchanged, edging down fractionally from about 2.12 percent to 2.12 percent, with no meaningful impact on the model.
• Net Profit Margin: Stable at roughly 10.32 percent, with only a negligible rounding adjustment in the latest update.
• Future P/E: Risen very slightly from around 74.30x to approximately 74.32x, signaling a minimal change in the implied earnings multiple.