Loop Capital Comfortable With Madison Square Garden Projections Heading Into Earnings

Madison Square Garden Co MSG is expected to report its Q4 results on August 19 and Loop Capital expects the company to report a loss due to the tough comparisons on the Sports line.

Loop Capital expects $218.8 million in revenues, and a net operating loss of $0.84 a share, while consensus stands at $218.9 million in revenues and a net operating loss of $1.00/share.

Analyst David Miller said the  results would be hit by New York Rangers' early exit from the NHL playoffs back in April. Last year, the Rangers went to the third round of the playoffs.

Further, Madison's re-branded New York Spring Spectacular live stage show would take place in June/July/August, rather than March/April/May as it had in the past.

"With that, most of those economics will accrue up to MSG's FQ1, not FQ4. Pre-open and marketing expenses for the show will also fall in MSG's FQ4," Miller wrote in a note.

The analyst seeks further detail surrounding timing of the new Las Vegas arena, more color around cap-ex, and additional granularity surrounding the types of acts MSG expects to host at the new arena.

Miller would also look for data on demand curves, as it will have a stiff competition in the DMA, particular from T-Mobile Arena, the MGM Grand Arena, the Mandalay Arts Center, and the Thomas/Mack Center at UNLV.

Miller maintained his Buy rating on the stock, with a target price of $217, representing a potential upside of 18 percent over Monday's close of $184.38.

"[W]ith cord-cutting and cord-shaving still capturing headlines, and with certain tent-pole summer films not performing up to expectations, MSG is about as clean of a story as you're going to get in SMID Media - no exposure to the cable bundle, no exposure to advertising, no exposure to F/X," Miller added.