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Shares of the TKO group (New York Stock Exchange: TKO) was upgraded to Buy from Hold by TD Cowen following decent first-quarter earnings, resolution of past legal issues, and its upcoming deal with Netflix (NFLX).
TD Cowen also substantially increased its price target in the stock to $127 from $92.
“We have long viewed TKO as a high-quality asset that should trade at a premium valuation, given the dearth of vehicles through which investors can directly participate in the rising value of sports media rights,” the investors said. analysts at TD Cowen, Lance Vitanza and Jonnathan. Navarrete, in note.
In March, TKO settled a nearly decade-old lawsuit with former UFC athletes, allowing the professional wrestling company to move forward from Zuffa's antitrust issue.
TKO also signed a deal with Netflix, as the prolific streaming service will air WWE Raw content beginning in the first quarter of 2025. TKO continues to partner with NBCUniversal (CMCSA) and Raw will remain on USA Network through the end of the year, allowing a smooth transition for fans.
“We view TKO as an iconic sports and entertainment company with a large fan base around the world,” added TD Cowen. “Its two key properties, UFC and WWE, reach approximately one billion homes each, with respective fan bases of more than 700 million and 1.2 billion. The properties create a significant amount of live, original and possibly essential, aimed at young and diverse fans.”
Who has emerged 25% Year to date. Is up to almost 2% during pre-market trading on Wednesday.
It also has a Buy rating from Looking Alpha and Wall Street analysts.
