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UFC owner TKO stock pops as TD Cowen upgrades to Buy

Published 15/05/2024, 17:30
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TKO
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TKO Group Holdings (TKO) shares jumped 2.8% Wednesday after TD Cowen lifted its rating for the stock to Buy from Hold, lifting the target to $127 from $92.

In a note, the bank told investors that, following strong first-quarter earnings, they see an attractive entry point into owning unique sports and entertainment properties.

TKO Group is a sports and entertainment firm that comprises the UFC, a mixed martial arts organization, and the WWE, a professional wrestling promotion giant.

"Relative to FY25E Adj. EBITDA, TKO trades at a substantial discount to its closest comp, despite an equal-to-better growth profile over near, medium, and longer terms," said TD Cowen.

"We have long considered TKO to be a high-quality asset that should trade at a premium valuation, given a dearth of vehicles by which investors may directly participate in the growing value of sports media rights," analysts added.

Overall, TD Cowen states that with key legal, operational, and technical risks resolved, they expect TKO to experience a meaningful multiple expansion over time.

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