Investment banking firm Jefferies initiated coverage of TKO with a ‘buy’ rating and a $120 price target. Shares jumped on Monday morning with the news of the coverage.
The news offsets a previous “market outperform” rating by TD Cowen last month with concerns about Zuffa’s exposure with the UFC Antitrust Lawsuit heading to trial in April.
The report does not indicate if Jefferies factored the lawsuit into its assessment. But, it emphasized the WWE’s Netflix deal for Monday Night Raw as well as its sponsorship growth and live events helping its value. Jefferies emphasized the need for content on streaming platforms and sports have been a major asset. It believes that the UFC and WWE together feed into each other in terms of the fan bases for each merging together.
The news is good for the UFC as it prepares for its media rights negotiations next year with hopes of finding multiple bidders to boost its value. The WWE has made changes (perhaps for the better) with three media deals in the last couple months for NXT, Smackdown and Raw. Each of the deals saw a major increase over the last deals. Although a great part of ESPN’s digital lineup, UFC will be looking for a big deal next time around.
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