Morgan Stanley raises rating for Sphere and Warner Music while downgrading Cinemark
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 18 2025
0mins
Should l Buy SPHR?
Source: SeekingAlpha
Morgan Stanley Upgrades: Morgan Stanley upgraded Sphere Entertainment (SPHR) and Warner Music (WMG) to "overweight" while downgrading Cinemark (CNK) to "equal weight," reflecting positive expectations for SPHR and WMG and concerns for CNK.
Performance Expectations: SPHR's success with the Wizard of Oz and concert residencies is expected to attract more investment, while WMG is seen as a compelling entry point due to anticipated earnings growth from streaming and cost management.
Cinemark Downgrade Reasons: The downgrade of Cinemark is attributed to a lowered North America box office forecast for 2026 and uncertainties in theatrical supply, which limit potential catalysts for re-rating.
Price Targets Adjusted: SPHR's price target was raised to $105, WMG's to $37, while CNK's target was reduced to $28, indicating varying expectations for future performance across these companies.
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Analyst Views on SPHR
Wall Street analysts forecast SPHR stock price to fall
12 Analyst Rating
7 Buy
4 Hold
1 Sell
Moderate Buy
Current: 115.720
Low
45.00
Averages
91.80
High
106.00
Current: 115.720
Low
45.00
Averages
91.80
High
106.00
About SPHR
Sphere Entertainment Co. is a live entertainment and media company. The Company's segments include Sphere and MSG Networks. Its Sphere segment is an entertainment medium powered by technologies to create multi-sensory experiences. Its venue can host a variety of events year-round, including The Sphere Experience, which features original immersive productions, as well as concerts and residencies from artists, and marquee sports and corporate events. Production efforts are supported by Sphere Studios. Its MSG Networks segment operates two regional sports and entertainment networks, MSG Network and MSG Sportsnet, as well as a direct-to-consumer and authenticated streaming product, MSG+, delivering a range of live sports content and other programming. The MSG Networks segment features a range of sports content, including exclusive live local games and other programming of the New York Knicks of the NBA and the New York Rangers, New York Islanders, New Jersey Devils and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Earnings Report: Sphere Entertainment reported a Q4 GAAP EPS of $1.23, beating expectations by $1.49, indicating a significant improvement in profitability and reflecting the company's robust performance in the market.
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CEO's Vision: CEO James Dolan played a crucial role in the arena's conception, design, and construction, demonstrating his commitment by monitoring the project remotely.
See More
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- Attraction of Shorted Stocks: LCID stock has become a target for heavy shorting as many experienced traders and institutional investors believe the company's fundamentals are overvalued, reflecting a pessimistic outlook on its future performance.
- Short Selling Mechanics: Short sellers bet on significant risks facing the company, such as poor earnings or industry headwinds, which may lead to a decline in stock price, thus garnering attention for short-selling strategies in the market.
- Short Squeeze Dynamics: When a stock's price unexpectedly rises, short sellers are forced to buy back shares to cover their positions, creating a surge in demand that further drives up the price, resulting in a feedback loop that can lead to explosive gains in a short time frame.
- Most Shorted Stocks List: As of February 13, the most heavily shorted stocks include companies with market caps above $2 billion and free floats exceeding 5 million shares, with short interest serving as a barometer of market sentiment.
See More
Sphere Entertainment Co. Reports Strong Q4 2025 Earnings and Expansion Plans
- Significant Revenue Growth: Sphere Entertainment Co. reported total revenues of $394.3 million for Q4 2025, with the Sphere segment contributing $274.2 million, reflecting strong performance from the Wizard of Oz show and concert residencies, thereby enhancing the company's competitive position in the entertainment market.
- New Venue Plans: The company announced plans to open a second Sphere venue at National Harbor in Maryland, targeting a four-year operational timeline supported by $200 million in state and local incentives, which will further expand the company's market reach and revenue streams.
- Improved Operational Efficiency: The Sphere segment achieved an adjusted operating income of $89.4 million, a significant turnaround from an adjusted operating loss of $800,000 in the prior year, demonstrating effective strategies in cost management and revenue growth, thereby boosting confidence in future profitability.
- Global Expansion Strategy: Management indicated plans to pursue 5 to 6 projects simultaneously over the next few years, emphasizing the use of various funding sources to support expansion efforts, showcasing the company's ambition in global markets and focus on emerging opportunities.
See More
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- Earnings Beat: HubSpot reported quarterly earnings of $3.09 per share, surpassing analyst expectations of $2.99, indicating robust profitability and boosting market confidence in the company's future performance.
- Significant Revenue Growth: The quarterly revenue reached $846.75 million, exceeding the Street estimate of $830.54 million and marking a 20.4% increase from $703.17 million in the same period last year, showcasing HubSpot's competitive strength in the market.
- Stock Price Surge: Following the positive earnings report, HubSpot's shares jumped 9.4% to $228.93 on Thursday, reflecting investor optimism about the company's growth potential and likely attracting more investor interest.
- Mixed Market Performance: While U.S. stocks showed mixed results overall, HubSpot's strong performance distinguished it among many stocks, demonstrating relative resilience and appeal in a fluctuating market.
See More
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- Earnings Beat: Sphere Entertainment reported a revenue of $394.3 million for Q4, nearly 28% higher year-over-year and surpassing the consensus estimate of $378.85 million, indicating strong market performance and growth potential.
- Success of The Wizard of Oz: Revenue related to The Wizard of Oz surged 62% to $274.2 million, driven by 245 performances and increased per-show revenue, highlighting the project's popularity and profitability.
- Profit Turnaround: The company achieved a net profit of $57.6 million for the three months ending December 31, compared to a loss of nearly $126 million last year, demonstrating a significant improvement in financial health.
- Global Expansion Plans: CEO James Dolan emphasized the company's focus on expanding its global footprint, including plans for Abu Dhabi and National Harbor, reflecting confidence in future growth and strategic positioning.
See More
Sphere Entertainment Q4 Earnings Exceed Expectations
- Strong Earnings Report: Sphere Entertainment reported a Q4 GAAP EPS of $1.23, beating expectations by $1.49, indicating a significant improvement in profitability and reflecting the company's robust performance in the market.
- Revenue Growth: The company achieved Q4 revenue of $394.3 million, representing a 27.9% year-over-year increase and exceeding market expectations by $16.7 million, demonstrating strong business expansion and recovery in market demand.
- Optimistic Market Outlook: Sphere Entertainment's high short interest indicates a promising market outlook, attracting investor attention and potentially driving further stock price increases.
- Quant Rating Support: According to Seeking Alpha's Quant Rating, Sphere Entertainment is rated as a strong buy among mid-cap stocks, reflecting analysts' confidence in its future performance and likely attracting more investor interest.
See More
