Since opening on Wall Street TKO Group Holdings, Inc. has been ascending based on the profits of the UFC and WWE. However, an investment bank, TD Cowen, has given the stock a “market perform” recommendation.
Market perform is a neutral assessment that does not imply a strong recommendation to buy or sell. This is in contrast to other recommendations to buy the stock based on the company’s strong profits. The analysts note a target price of $92 while others have the stock targeting $110.
It was the first time that stock analysts expressed concern with the UFC antitrust lawsuit filed by former UFC fighters. The Cung Le, et al. lawsuit against Zuffa heads to court in April.
Analysts Stephen Glagola and George Kuhl expressed caution on TKO’s ability “to continue generating profits and returns for shareholders amid ongoing litigation,” per a report from Bloomberg. “…we think the market is underappreciating the risks,” stated the analysts. The report from Bloomberg notes that “the potential for significant money damages as an “impediment for management to announce share repurchases or dividends.””
In response, lead counsel for the UFC, William Isaacson remarked that the report does not reflect the “latest developments” in the lawsuit. “The plaintiffs recently dropped their request for injunctive relief in the Le case – meaning the April trial will not involve changes to UFC’s business model going forward,” he stated. Of course, what is not included in the comment is that there is still a possibility that the injunctive relief may occur in the Kajan Johnson-UFC lawsuit which is trailing the Le lawsuit.
Despite this one non-recommendation, Bloomberg notes nine other “buy” recommendations for TKO stock from analysts. The news did see the stock down for the day and for the week closing at $77.12.
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