Sphere Entertainment's stock climbs after Sphere venue opens with stunning U2 concert

By James Rogers

U2 kicked off their 25-show residency at Sphere in Las Vegas Friday

Shares of Sphere Entertainment Co. rose 11.7% Monday after the eagerly-anticipated opening of the Sphere with a stunning show by U2.

The 360-foot tall immersive concert and entertainment venue at the Venetian Resort is the world's largest spherical structure, according to the Venetian's website. U2 kicked off their 25-show residency at Sphere Friday.

Related: Madison Square Garden says Sphere Entertainment is selling 5.25 million shares

Next month The Sphere Experience will launch with the Postcard from Earth immersive experience by director Darren Aronofsky.

In a note released Monday, Macquarie analyst Paul Golding, who experienced the U2 show this weekend, described Sphere as revolutionary. "For the last several years, amid budget increases and mgmt commentary to justify them, the goal set forth by the company has been to redefine live entertainment," he wrote. "Ease of production aside, we feel mgmt achieved its goal of setting a new standard in the live category -- premium, totally immersive, blurring the lines between digital and physical planes in ways unknown to us to exist otherwise."

Related: Madison Square Garden Entertainment says shareholder Sphere has commenced a secondary offering of 7.2 million shares

JPMorgan Chase & Co. recently raised its Sphere Entertainment (SPHR) price target to $28 from $25 following the company's fourth-quarter results. "While the attention the exosphere received on social media and the press has given us incremental confidence on what forward demand will be from artists, consumers, and corporate partners, the ultimate success of the venue, and viability of future Spheres, will hinge largely on original content," wrote JPMorgan analyst David Karnovsky.

Shares of Sphere Entertainment are up 99.9% this year, outpacing the S&P 500 Index's SPX gain of 11.7%.

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Madison Square Garden Entertainment Corp. (MSGE), which was formerly MSGE Spinco, completed its spinoff from Sphere Entertainment earlier this year. Madison Square Garden Entertainment's stock is down 1.6% in the last three months, outpacing the S&P 500 Index's decline of 3.8%.

-James Rogers

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10-02-23 1031ET

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