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Tuesday, BofA Securities reinstated coverage on TKO Group Holdings (NYSE: TKO) stock with a Buy rating and set a new price target of $140.00.
The firm highlighted the company's impressive year-to-date performance, with shares rising approximately 45%, which notably exceeds the gains of traditional media companies and the broader market.
The analyst from BofA Securities attributed this outperformance largely to the robustness of sports rights, which have continued to show strength despite the ongoing decline of the linear TV ecosystem. The recent renewal of the NBA media rights was cited as a testament to the strong market demand for sports content.
The analyst emphasized that solid sports viewership remains a key factor in supporting the linear TV model through affiliate and advertising revenues.
In addition to the sustenance provided by traditional broadcast models, sports rights are also seen as instrumental in fostering the growth and engagement of emerging streaming platforms.
The potential benefits include driving platform adoption and reducing subscriber churn. The analyst further noted that the emergence of new, financially potent players in the sports rights arena, such as Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN), will likely continue inflating the value of sports broadcasting rights.
Looking ahead, the firm believes that TKO Group is well-positioned to benefit from this trend. The upcoming negotiations for the domestic rights of major sporting events, such as the UFC at the end of 2025 and WWE PLE in early 2026, are expected to be advantageous for TKO Group Holdings. The anticipation of these events has contributed to the positive outlook and the raised price target for the company's shares.
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