Analysts at BofA reinstated TKO Group (NYSE:TKO) with an investment rating of “Buy” on Tuesday. The research firm noted that the company’s shares, which are up nearly 45% YTD, represent significant outperformance vs. traditional media companies and the broader market.
BofA believes YTD share performance has been driven, in part, by the underlying strength of sports rights.
“The recent NBA media rights renewal underscores that the market for sports rights remains extremely strong despite the continued secular decline of the linear TV ecosystem, as strong sports viewership helps sustain the linear ecosystem (both via affiliate and advertising revenues) while also potentially driving adoption/engagement/churn reduction for new emerging streaming platforms,” BofA said in their August 20 commentary.
BofA said the emergence of new, well-capitalized bidders outside of the traditional media ecosystem for sports rights like Netflix and Amazon is an additional tailwind for sports rights inflation going forward, which bodes well for TKO’s upcoming domestic rights, including UFC (end of 2025) and WWE PLE (early 2026).
TKO has a PT of $140 from the research firm, implying an upside of nearly 19%.
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