Bernstein SocGen Group Starts TKO Group Holdings (TKO) at Outperform

Bernstein SocGen Group initiates coverage on TKO Group Holdings (NYSE: TKO) with a Outperform rating and a price target of $190.00.

The analyst comments "TKO Group (Outperform, $190 TP, 20% upside potential): Dominant combat sports IP with multiple levers to grow. We believe TKO represents an attractive investment in unique, owned & operated live sports entertainment with a clear strategy for sustained growth. In the near-term, we expect the UFC rights renewal to exceed $1B annually, while live events and sponsorship growth continue to inflect (segment EBITDA growth +LSD vs. consensus). We believe the transformation at the WWE has legs and should continue to drive efficiency gains and cost savings (margin expansion +LSD vs. consensus). Recent acquisitions from Endeavor enhance the longer term growth outlook while incorporating attractive superfan expsoure to the FIFA World Cup and LA & Milan Olympics into the near-term growth algorithm. As TKO continues to “festivilize” its live events, we also see a compelling growth opportunty around site fees, with April’s Kansas City Takeover having proven the group’s ability to put “heads in beds”. Valuation methodology: Our $190 TP implies a 30x multiple, which is below expectations; however, we believe consensus estimates still do not fully incorporate the impact of the recent acquisitions. We assume a WACC of 9% and a terminal growth rate of 3%."

For an analyst ratings summary and ratings history on TKO Group Holdings click here. For more ratings news on TKO Group Holdings click here.

Shares of TKO Group Holdings closed at $159.55 yesterday.

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