Analysts at Bank of America Securities initiated research on UFC and WWE owner TKO Group (TKO) with a Buy rating and a $100 price target.
“TKO, formed in September 2023, represents the combination of two iconic brands – wrestling giant WWE and mixed martial arts league UFC – with significant synergies and growth potential,” analysts said.
The investment bank projects TKO to have a compound annual growth rate (CAGR) of 13% for fiscal years 2025 and 2026, as well as an EBITDA CAGR of 20% and free cash flow CAGR of 34%.
Analysts say it offers “an attractive combination of revenue growth, margin expansion and free cash flow generation.”
BofA analysts see UFC’s upcoming U.S. media rights deals as a key driver of TKO’s mid-term results.
While media rights buyers are becoming more discerning, as evidenced by modest increases in SmackDown rights, Netflix’s (NASDAQ:) recent acquisition of Raw rights introduces a global player that will potentially boost WWE’s global appeal in the long term, they noted.
“We believe UFC’s U.S. rights remain the crown jewel of TKO’s media rights portfolio and will be significantly increased upon renewal in ’26,” the BofA team wrote.