Sphere Entertainment (SPHR) PT Lowered to $160 at BTIG

BTIG analyst Tyler DiMatteo lowered the price target on Sphere Entertainment (NYSE: SPHR) to $160.00 (from $190.00) while maintaining a Buy rating.

The analyst comments "Ahead of 3Q26 earnings (est early-mid November), we lower our Sphere Experience revenue for 3Q/4Q to $110M/$148M (from $123M/ $164M) vs. the Street $123M/$164M. Our reduction is driven largely by more conservative sell through and revenue/show assumptions given our ticketing trends math, our estimate of implied WoZ 3Q exit rate bookings and current estimates of October booking trends. We highlighted this investor debate in our note last week related to WoZ surpassing $500M in ticket sales at +4M tickets sold (see here), as investors balance near term data points + the sequential bridge to 4Q numbers given a content "air pocket" with their view of what is still a positive longer term story that SPHR offers given its unique position in the secularly growing live entertainment space. As we highlighted last week, we expect shares to remain choppy into the print with the stock down ~19% over the past week (was down ~12% yesterday following a downgrade), but shares are up ~18% YTD. Our lower SPHR segment level revenue estimate for 3Q/4Q is now $197M/$263M (from $211M/$279M) vs. the Street $211M/ $277M. Our hunch is numbers nudge lower towards our estimates as people calibrate their estimated booking trends and sell through based on 1P/3P data. We make no material revenue estimate changes to concerts, sponsorship, or other revenue. The implied 3Q/4Q revenue reduction due to WoZ points to a net $30M revenue revision lower to FY2026, which we flow through to out year segment revenue, with our new FY2026/FY2027 segment revenue of $952M/$1.0B (from $982M/$1.03B). We adjusted direct opex and resulting flow through pointing to our new estimated 3Q/4Q adjusted EBITDA of $33M/$82M (from $41M/$97M) vs. the Street at $41M/$96M. Our new FY2026/FY2027 adjusted EBITDA moves to $230M/$270M (from $252M/$300M). We view our estimate reduction as prudent given our view of WoZ bookings trends while sponsorship and concerts both continue to accelerate and surprise to the upside. Taking a step back from the model mechanics, the business still remains fundamentally sound, and we like the longer term thesis with the catalyst path potential four-fold over the next 12–24 months: 1) additional SPHR venue announcements, 2) new content offerings rolled out, 3) incremental concert bookings with both existing and new artists driving higher show count, and 4) existing and new sponsorship deals driving low to mid-teens sponsorship revenue growth over a multi-year period. We lower our PT to $160 (from $190) to reflect lower estimates, shift in probability weights across our bear/base/bull ranges, and our assumption of underwriting lower EBITDA multiples."

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