TKO Group Holdings (TKO – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Randal Konik from Jefferies maintained a Buy rating on the stock and has a $220.00 price target.
Randal Konik has given his Buy rating due to a combination of factors that highlight the promising future of TKO Group Holdings. One of the primary reasons is the anticipated media rights deal for UFC, which is expected to significantly boost the company’s revenues and EBITDA. The market for live sports content is thriving, and the UFC’s global appeal positions it to secure a lucrative deal, potentially doubling its current annual average value. This could lead to a substantial increase in EBITDA, which is projected to be conservative compared to other recent sports media rights deals.
Moreover, the UFC’s viewership engagement remains strong compared to other major sports, suggesting a robust demand that could drive higher media rights valuations. The company’s shares are currently undervalued relative to peers, and the expected media rights deal could lead to a re-rating of TKO’s valuation. Additionally, TKO’s business model, characterized by high margins and low capital expenditure, along with strong free cash flow conversion, makes it an attractive investment opportunity. These factors collectively support the Buy rating, indicating a positive outlook for TKO Group Holdings.
In another report released on March 8, Seaport Global also upgraded the stock to a Buy with a $164.00 price target.
Based on the recent corporate insider activity of 59 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TKO in relation to earlier this year.
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