Benchmark analysts have cut their rating on World Wrestling Entertainment (NYSE:WWE) to Hold following news that the “sports entertainment” empire has a deal to be acquired by Endeavor Group Holdings (NYSE:EDR).
Endeavor plans to combine WWE with its own Ultimate Fighting Championship into a new $21B combat sports venture it’s calling TKO, with Endeavor holders owning 51% to WWE holders’ 49%.
WWE stock (WWE) was up 6.6% Tuesday afternoon, rebounding from a 2.2% drop Monday, while Endeavor stock (EDR) rose 4.8% in its own rebound from a Monday decline of 5.9%.
But Benchmark is cutting WWE to Hold, saying its target valuation was essentially realized including an “aggressive target multiple,” based on a potential sale or a “meaningful” step in domestic rights fees.
“We are cautious EDR’s valuation of TKO could be aggressive, and the all-stock and somewhat complex transaction was disappointing versus a cash deal consideration,” analyst Mike Hickey said.
TKO’s implied enterprise value/adjusted EBITDA multiple is about 21x (WWE at 24x, UFC at 19x), he suggested, while estiamted fiscal 2026 multiple for TKO is about 13x.
One catalyst ahead is a potential synergy boost on the upcoming media rights renewals both at WWE and UFC, he noted, with anticipated net synergies at $50M-$100M.
Elsewhere in WWE’s big news week, the company said the weekend WrestleMania event was its most successful ever.
The two-night event at Los Angeles’ SoFi Stadium set records for viewership, gate, sponsorship, merchandise and social media, WWE said.
Gate receipts of more than $21.6M beat its previous record by 27%, and 161,892 attended over the two nights. Sponsorship revenue passed $20M (more than doubling the previous record), and merch sales rose 20% from last year’s record total, while in social metrics, it hit more than 500M views and 11M hours of video consumed (up 42% year-over-year).
WWE and Endeavor rise after deal; Benchmark cuts WWE on ‘aggressive’ valuation
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