Stifel Nicolaus analyst Benjamin Mogil upgraded his rating on Madison Square Garden Co.'s stock to "Buy" from "Hold" Monday, saying he expects strong growth after seeing results of the company's fiscal third quarter.
THE OPINION: Madison Square Garden reported Friday that its profit soared 63 percent from January through March with help from the renovation of its famed New York arena and improved revenue from the New York Knicks.
Mogil said that beyond the strong quarter, he sees sustainable growth ahead for the company.
Madison Square Garden, which owns the Knicks as well as the New York Rangers hockey team, will continue to benefit from the renovation and a new labor agreement with the National Basketball Association, Mogil said. He also expects a labor deal with the National Hockey League next year that could boost the company.
He also thinks that the company's third-quarter revenue suggest that the deal it struck with Time Warner Cable Inc. in February to carry its networks MSG, MSG+ and Fuse was better than expected, as were contract increases with other cable companies.
He also set a price target of $45 for the company.
THE STOCK: Shares of the company rose 55 cents, or 1.4 percent, to $38.49 in afternoon trading. Shares peaked earlier at $38.91, their highest level since Madison Square Garden was spun off from Cablevision Systems Corp. in February 2010.
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