Analyst Benjamin Swinburne from Morgan Stanley reiterated a Hold rating on TKO Group Holdings and increased the price target to $165.00 from $160.00.
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Benjamin Swinburne has given his Hold rating due to a combination of factors that reflect both the strengths and current valuation of TKO Group Holdings. The company has demonstrated strong performance in integrating WWE, especially with the new five-year ESPN agreement, which aligns with prior expectations and reduces risk. This agreement, along with a potential successful UFC renewal, is already reflected in consensus estimates and the current valuation of TKO shares.
Despite the positive outlook for sports assets like WWE and UFC, which generate recurring revenues and have high free cash flow conversion, TKO shares are trading at a premium valuation of approximately 26 times the estimated free cash flow per share for 2026. This premium valuation, coupled with the fact that consensus estimates already account for significant rights appreciation, leads to a balanced risk/reward scenario. Therefore, Swinburne maintains a Hold rating, suggesting that the current market price adequately reflects the expected bullish outcomes for TKO’s major media rights renewals in 2025.
According to TipRanks, Swinburne is a 5-star analyst with an average return of 13.0% and a 58.99% success rate. Swinburne covers the Communication Services sector, focusing on stocks such as Spotify, Echostar, and Charter Communications.