MSGN Stock Sinks on Guggenheim Bear Note

The equity has been running into familiar resistance at its 140-day moving average

Deputy Editor
Nov 19, 2019 at 9:58 AM
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The shares of cable TV company MSG Networks Inc (NYSE:MSGN) are lower this morning, following a downgrade from Guggenheim to "sell" from neutral." The brokerage firm maintained its $15 price target -- a 19% discount to last night's close -- and said it foresees a challenged position for the entertainment name amid upcoming contract renewals with Altice USA (ATUS) and Comcast (CMCSA), which make up 40% of MSGN's subscriber base. The stock is down 5.3% at last check, to trade at $17.50.

A bear note from Guggenheim isn't the only thing creating headwinds from MSGN. The stock recently ran up to its 140-day moving average, which also acted as a ceiling on the charts earlier this year. And while the security has managed a roughly 34% gain off its late-August six-year lows with a little help from a massive bull gap later that same month, the stock is still down 25% for the year. 

The brokerage's bear note is in good company, though. Prior to today, five of the six analysts in coverage called MSG Networks a "hold" or worse. Plus, the consensus 12-month target price of $17.86 is a slight discount to last night's close. 

Short sellers are likely celebrating today's dip. While short interest dropped 21.9% in the last reporting period, the 14.47 million shares sold short represent 32.3% of the stock's available float, or over two weeks of trading at MSGN's average pace.

 

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