Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Morgan Stanley (NYSE:MS) maintained its Equalweight rating and $165.00 price target on TKO Group Holdings (NYSE:TKO) on Monday, citing the company’s new distribution agreement. Currently trading at $176.45 with a market capitalization of $14.47 billion, TKO maintains a "GOOD" financial health score according to InvestingPro analysis.
The firm highlighted that the UFC’s new agreement will significantly expand its reach through two key channels. Premium fight cards, known as numbered events, will transition from ESPN+’s "double pay wall" system to CBS network, providing national exposure.
All 43 UFC events will become available to an estimated 50 million U.S. Paramount+ subscribers, which Morgan Stanley notes represents a substantially larger audience than ESPN+’s estimated 22-25 million subscriber base.
Morgan Stanley also pointed out that UFC will gain two minutes per hour in advertising inventory across all events under the new agreement, creating additional revenue opportunities beyond the headline financial terms.
The firm maintained its $165.00 price target on TKO Group stock, suggesting the broader distribution and incremental advertising revenue are already factored into its valuation model. Trading near its 52-week high of $182.60, TKO currently commands a premium P/E ratio of 68.46. For deeper insights into TKO’s valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, TKO Group Holdings reported second-quarter 2025 earnings that exceeded expectations, with an EPS of $1.17, surpassing the forecast of $1.13. The company’s revenue also outperformed projections, reaching $1.31 billion compared to the anticipated $1.22 billion. UBS responded to these strong results by raising its price target for TKO Group from $195 to $200 while maintaining a Buy rating. Additionally, Jefferies reiterated its Buy rating on TKO Group, maintaining a price target of $220, citing confidence in the company’s media rights strategy. The company also announced a significant seven-year media rights agreement with Paramount, valued at an average of $1.1 billion annually, making Paramount the exclusive home of all UFC events in the U.S. starting in 2026. Despite these positive developments, Benchmark maintained a Hold rating on the stock, expressing concerns over structural vulnerabilities. The firm noted declines in UFC’s live events and hospitality revenue due to site fee timing issues, as well as a contraction in IMG revenue from rights losses. WWE attendance also fell as fewer events were held during the quarter.
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