2 days ago
TKO Group Gains After Guggenheim Lifts Price Target on UFC Media Deal
TKO Group Holdings (TKO, Financials) rose Tuesday after Guggenheim increased its price target to $205 from $200, citing the financial impact of a new UFC media rights agreement with Paramount. The target hike came the same day the stock closed at $186.02, up 10.13% over the past week.
Warning! GuruFocus has detected 7 Warning Sign with TKO.
The seven-year deal, set to begin in 2026, will see all UFC numbered events and Fight Nights stream on Paramount+, with select events simulcast on CBS. The agreement carries an annual average value of $1.1 billion, including standard escalators, and grants roughly two minutes of advertising inventory per hour for each event.
Guggenheim's Curry Baker raised the firm's 2026 UFC media rights forecast to $920 million from $890 million, while increasing OIBDA estimates by $30 million. The firm noted that cash payments are weighted toward later years in the contract.
The deal prompted other analyst actions. Wolfe Research boosted its target to $211, BofA Securities to $210, and Goldman Sachs to $202, all maintaining Buy ratings. UBS kept its Buy rating with a $164 target, while Morgan Stanley reiterated Equalweight at $165. Analysts pointed to higher expected free cash flow, expanded distribution, and stronger long-term fundamentals.
With both its WWE and UFC contracts renewed, TKO is positioned to focus on execution, new combat sports opportunities, and potential capital returns. Investors will be watching revenue recognition timing and operational synergies from the updated agreements.
This article first appeared on GuruFocus.
