What Happened?
Shares of content production and distribution company Sphere Entertainment (NYSE: SPHR) jumped 1.8% in the morning session after the company announced its 'The Wizard of Oz' experience at the Las Vegas Sphere has generated over $65 million in ticket sales.
The new show, which opened on August 28, has sold more than 500,000 tickets in total as of September 12. This early success has led analysts at Wolfe Research to project that the company could potentially drive profits beyond $500 million by 2026.
After the initial pop the shares cooled down to $58.34, down 0.1% from previous close.
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What Is The Market Telling Us
Sphere Entertainment’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 5% on the news that Guggenheim raised its price target and maintained a Buy rating on the stock, citing the stronger-than-expected performance of the company's "The Wizard of Oz" experience.
The new price target was lifted to $76 from $75. The revision follows numerous sold-out shows and strong ticket sales since the attraction's opening. The investment firm noted that the show is averaging over $600,000 in revenue per performance, significantly outperforming the launch of its previous "Postcard" show. Based on this success, Guggenheim increased its revenue and adjusted operating income forecasts for Sphere's third quarter to $179 million and $20 million, respectively. The firm also boosted its full-year adjusted operating income forecast, signaling confidence in the entertainment company's near-term financial performance.
Sphere Entertainment is up 40.5% since the beginning of the year, and at $58.34 per share, has set a new 52-week high. Investors who bought $1,000 worth of Sphere Entertainment’s shares 5 years ago would now be looking at an investment worth $770.06.
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