Jefferies thinks traders should purchase up TKO Group , calling the corporate a “knockout combo” of two main leisure giants. Analyst Randal Konik initiated TKO, the merger of World Wrestling Leisure and Final Preventing Championship, with a purchase ranking and assigned a 12-month value goal of $120. That value goal suggests shares might bounce greater than 39 % from Friday’s shut. Shares of the corporate, which made its public buying and selling debut on Sept. 12, are up 7.4% this yr. The corporate is 51% owned by Endeavor Group Holdings, which owns UFC and Hollywood expertise company WME, and 49% owned by WWE shareholders. In accordance with CEO Ari Emanuel, after spending the primary 18 months integrating UFC and WWE, TKO will start to accumulate different sports activities properties and goal to increase internationally. “With these assets now operating under the same roof, we believe they can generate meaningful top-line and EBITDA growth via rights renewals, and synergies including maximizing gate performance, cross-pollinating across fan bases, sponsorships, and other cost efficiencies,” Konik wrote in a Monday word. Konik referred to as UFC a “best-in-class” leisure play that’s well-positioned to generate robust development and margins — particularly given its media rights enlargement alternative, sponsorship development and compelling stay occasions. Now coupled with WWE, Konik thinks TKO’s administration can drive significant top-line development, engaging margin enlargement and vital free money circulate era of greater than $3.6 billion for the corporate between 2023 and 2026. With these expectations, Konik added that, “we would expect mgmt to review its capital allocation strategy and look to authorize a share repo program or dividend plan.” The analyst additionally famous that TKO expects to generate between roughly $50M to $100M in annual run charge price synergies over the following a number of years, and that he expects top-line development to be partly pushed by pricing enhancements with new ticketing know-how, in addition to extra sponsorship alternatives.
