Buy MSG Sports as New York Knicks and Rangers parent is being underestimated, Citi says

Citi initiated coverage on Madison Square Garden Sports (MSGS) with a Buy rating and a $285 per share price target, implying over 40% upside. The bank views MSGS as significantly undervalued, trading at a 55% discount to Forbes valuations, well above its historical average of 44%. This valuation gap, coupled with favorable private market trends and potential minority interest sales of the Knicks or Rangers, presents a compelling buying opportunity for investors.

Analysis

Citi has initiated coverage on Madison Square Garden Sports (MSGS) with a 'Buy' rating and a $285 per share price target, implying a potential upside exceeding 40%. The core of the investment thesis, articulated by analyst Steven Sheeckutz, is a significant valuation disconnect. MSGS is reported to be trading at a ~55% discount to third-party Forbes valuations, a gap considerably wider than its historical average of ~44%. Citi views this as a compelling buying opportunity, with potential catalysts to narrow the discount. These catalysts include favorable private market trends for sports assets and, more specifically, a potential minority interest sale of either the Knicks or the Rangers. This bullish call comes after the stock has pulled back more than 10% in 2025, potentially offering an attractive entry point, and the shares responded with a 2% gain in premarket trading on the news.

Key Decisions for Investors

• Investors may consider the stock's recent 10% pullback as a strategic entry point, aligning with Citi's view that MSGS is undervalued relative to its private market asset value.
• Monitor for any announcements regarding a potential minority stake sale in the Knicks or Rangers, as this is highlighted as a primary catalyst that could unlock significant shareholder value and close the valuation gap.
• The investment thesis is contingent on the convergence of public and private market valuations; therefore, tracking the discount to Forbes' team valuations should be a key performance indicator for the position.