UBS analysts kicked off coverage of TKO Group Holdings Inc with a ‘Buy’ rating and a 12-month target price of $123 per share, calling the combination of WWE and UFC "a rare pure-play in live sports with rights renewals and synergies on the horizon."
"We believe the merger of WWE and UFC will improve monetization through cost and revenue synergies and create an entity generating strong cash flows that will enable returns to shareholders and optionality for management to acquire other live sports properties," the analysts wrote.
They expect TKO’s domestic rights renewals to be supplemented by new international deals, sponsorship opportunities and growth in live event revenues.
Analysts at UBS expect TKO’s total revenues to increase at an estimated 10% compound annual growth rate (CAGR) from 2023 to 2026, following the 12% CAGR from 2020 to 2023, with synergies and renewals supporting around an estimated 15% earnings before interest, taxes, depreciation and amortization (EBITDA) growth from 2023 to 2026.
TKO Group shares eased 1.4% to $99.32 in late-morning trading on Friday.
Contact Sean at sean@proactiveinvestors.com