Why Is Sphere Entertainment Stock Sinking Monday?

Sphere Entertainment Co. (NYSE:SPHR) stock is down nearly 12% on Monday after Craig-Hallum downgraded it and sharply cut its price forecast.

Craig-Hallum downgraded Sphere Entertainment to Hold from Buy and lowered its price forecast to $132 from $170.

The reduced forecast represents a $38 cut, signaling a more cautious outlook from the firm.

The downgrade comes weeks after Jim Cramer struck a bullish tone on the company. During CNBC’s “Mad Money Lightning Round” on Sept. 14, Cramer recommended buying Sphere Entertainment, calling it “amazing.”

Technical Analysis

Sphere Entertainment remains in a clear short-term downtrend.

The stock is trading 18.3% below its 20-day simple moving average and 23.2% below its 50-day SMA. It is also 12.2% below its 200-day SMA.

The 20-day SMA sits below the 50-day SMA, reinforcing the bearish near-term setup. However, the 50-day SMA remains above the 200-day SMA, leaving the longer-term trend structure under pressure but not fully broken.

Momentum is deeply oversold. The relative strength index stands at 23.75.

An RSI below 30 can indicate that selling has become stretched and may increase the chances of a rebound. However, an oversold reading does not guarantee that the stock has found a bottom.

Key resistance sits near $118. A move above that level could help the stock begin repairing its short-term trend.

Support sits near $104.50. A break below that level could open the door to further weakness.

Earnings And Analyst Outlook

Sphere Entertainment’s next major scheduled catalyst is its estimated Nov. 3 earnings report.

Wall Street expects a loss of $1.33 per share, compared with a loss of $2.80 per share a year earlier. Revenue is expected to rise to $288.10 million from $262.51 million.

The stock carries a Buy consensus rating with an average price forecast of $178.30.

Recent analyst actions include Guggenheim raising its price forecast to $208 while maintaining a Buy rating on Sept. 2. Piper Sandler initiated coverage with an Overweight rating and $185 forecast on Aug. 20. BTIG maintained a Buy rating and $190 forecast on Aug. 3.

Benzinga Edge Rankings

Sphere Entertainment has a Momentum score of 88.9 out of 100 on the Benzinga Edge scorecard.

The strong longer-term momentum reading contrasts with Monday’s sharp selloff and the stock’s deteriorating short-term technical setup.

For traders, the key question is whether Sphere Entertainment can hold support near $104.50 and reclaim $118 to begin rebuilding momentum.

Top ETF Exposure

The Schwab Ariel Opportunities ETF (NYSE:SAEF) has a 2.58% weighting in Sphere Entertainment.

Because of that exposure, significant inflows or outflows from the ETF can contribute to buying or selling activity in Sphere Entertainment shares.

Price Action

Sphere Entertainment shares were down 11.63% at $113.33 at the time of publication Monday, according to Benzinga Pro data.

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