Analyst Estimates: Here's What Brokers Think Of Madison Square Garden Entertainment Corp. (NYSE:MSGE) After Its First-Quarter Report

Madison Square Garden Entertainment Corp. (NYSE:MSGE) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Revenues missed expectations somewhat, coming in at US$142m, but statutory earnings fell catastrophically short, with a loss of US$1.00 some 108% larger than what the analysts had predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Madison Square Garden Entertainment

Taking into account the latest results, the current consensus from Madison Square Garden Entertainment's eight analysts is for revenues of US$913.0m in 2024. This would reflect a reasonable 7.8% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 25% to US$1.14. In the lead-up to this report, the analysts had been modelling revenues of US$914.4m and earnings per share (EPS) of US$1.17 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at US$40.00, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Madison Square Garden Entertainment, with the most bullish analyst valuing it at US$43.00 and the most bearish at US$36.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Madison Square Garden Entertainment's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 65% over the past three years. Compare this to the 180 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.4% per year. So it's pretty clear that, while Madison Square Garden Entertainment's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$40.00, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Madison Square Garden Entertainment. Long-term earnings power is much more important than next year's profits. We have forecasts for Madison Square Garden Entertainment going out to 2026, and you can see them free on our platform here.

Even so, be aware that Madison Square Garden Entertainment is showing 2 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.