Jefferies analysts started covering TKO Group Holdings (NYSE:TKO), assigning a Buy rating and a target price of $120, suggesting a potential 40% increase from TKO’s closing price on Friday.
TKO Holdings emerged from the merger of the Ultimate Fighting Championship (UFC) and World Wrestling Entertainment (WWE) in September 2023, a deal valued at $21.4 billion, creating a major entity in fighting sports and entertainment. The company was subsequently listed on the New York Stock Exchange.
Jefferies anticipates that the unified operation of these entities will drive significant revenue growth (approximately low double digits on average) and EBITDA growth (high teens percentage on average). They cite potential from rights renewals, synergistic benefits including improved gate performance, fan base cross-pollination, sponsorships, and cost savings of around $100 million annually.
Highlighting the UFC as a top-tier entertainment asset, the analysts argue that TKO Holdings is primed for strong growth and impressive margin expansion.