Shares of UFC and WWE owner TKO Group (TKO) gained in today’s trading after Redburn Atlantic started covering it with a Buy rating. The investment firm thinks wrestling and mixed-martial arts pay-per-view rights are becoming more popular, which could boost the stock. Analyst Ed Vyvyan mentioned that the company’s growth will focus on renewing key deals for WWE and UFC rights in 2025 and 2026.
Redburn pointed out that WWE’s deal with Peacock is currently undervalued. In addition, they believe the competition between traditional media companies like Comcast and new media giants like Netflix is beneficial for rights holders like WWE and UFC. In fact, both have seen significant increases in the value of their content over the past decade. It also helps that sports content tends to have very loyal fan bases who regularly tune in to see their favorite teams, or, in TKO’s case, favorite athletes.
Redburn also expects TKO’s strong cash flow and low capital expenditure to eventually lead to a share buyback program once new deals are made. As a result, the firm has a price target of $129 per share, which is over 20% higher than the current stock price.
Is TKO a Good Stock to Buy?
Overall, analysts have a Strong Buy consensus rating on TKO stock based on five Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 30% year-to-date rally, the average TKO price target of $123.50 per share implies 16.44% upside potential.
