Morgan Stanley raises rating for Sphere and Warner Music while downgrading Cinemark
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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