Entertainment, from sports to movies, has always had a place in humanity’s existence. It makes the good times better and the bad times a little easier to bear; just ask anyone alive during the Depression about Shirley Temple movies. But today, TKO Group (NASDAQ:TKO) got a 2.5% boost in Wednesday afternoon’s trading, thanks to improving sentiment from analysts.
While the recent deal between Netflix (NASDAQ:NFLX) and the NFL for Christmas Day games drew a lot of attention, TKO benefited from a halo effect of sorts. Jefferies analysts, led by Randal Konik, noted that the NFL deal is good news for TKO. Not so much because of any connection between it, Netflix, and the NFL, but because it demonstrates “…demand for premium sports content.”
It also demonstrates a potential market for sports streaming, and though Netflix may not be interested in TKO content, someone else might be. With the streaming media market increasingly competitive, any edge is worth considering. Premium sports, for some, might be that edge. Indeed, TKO did put together a deal with Netflix not so long ago for WWE Raw content starting in 2025.
TD Cowen – TKO Deserves a Premium Valuation
Konik et al weren’t the only ones to come out in TKO’s favor. TD Cowen’s Lance Vitanza and Jonnathan Navarrete came out with a note as well, declaring TKO to be a “…high-quality asset that should trade at a premium valuation, given a dearth of vehicles by which investors may directly participate in the growing value of sports media rights.” Throw in some recently-settled legal drama and that opens up some significant new potential, the duo noted.
It’s worth noting that Vitanza is a five-star analyst with a 25.5% average return per rating.
Is TKO a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TKO stock based on eight Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 29% year-to-date rally, the average TKO price target of $109.11 per share implies 4.11% upside potential.
