World Wrestling Entertainment (WWE) stock caught an upgrade from analysts at Wells Fargo on Tuesday as the sports media giant continues its search for a buyer.
The bank upgraded shares to Equal Weight from Underweight and upped its price target to $100 from $52 a share in a new note, writing: “[WWE’s] strategic process has a reasonable probability of success.”
The stock, up more than 30% year-to-date, was muted in early morning trading on Tuesday.
Wells Fargo argued a strategic buyer, rather than a financial buyer, could self-distribute WWE through their owned networks and/or streaming platforms. The bank estimated WWE would be worth roughly $8 billion in a sale. At its current share price, WWE has a market cap closer to $6.7 billion.
“While no potential strategics have commented, we think there will be reasonable interest from the likes of NFLX, AMZN, and CMCSA since WWE provides lots of hours of content and has a dedicated audience,” Wells Fargo analyst Steve Cahall said.
“Ultimately, we think NFLX would rather pick-up a night of WWE rights vs the whole company. We view CMCSA as less likely than many investors, though we note prior (arguably defensive) deals for DreamWorks and Sky,” he added.
Comcast’s NBCUniversal is WWE’s largest media rights holder, with Peacock serving as the exclusive streaming home to the network.
Last week, WWE denied a purchase by Saudi Arabia’s Public Investment Fund (PIF) after early reports asserted a deal was imminent.
A person familiar with the matter told Yahoo Finance WWE hasn’t sold itself to any entity, including PIF, although the company has increasingly expanded into the Saudi market in recent years.
The sales process, which kicked off earlier this month amid the surprise return of Vince McMahon to the board and as executive chairman, remains ongoing — although analysts have continued to debate potential buyers.
Lightshed Partners’ Rich Greenfield wrote in a blog post he sees Endeavour (EDR), owner of UFC, as a possible purchaser, although structuring a deal would likely be complicated given Endeavour’s weak stock performance compared to WWE’s. EDR’s stock is down more than 21% since its 2021 debut.
Greenfield listed Fox (FOXA), Disney (DIS), Netflix (NFLX), Amazon (AMZN), and Comcast (CMCSA) as other possibilities, especially as the appetite for sports rights ramps up in the media and tech space.
The analyst said Disney “would excite us the most” as the company, “could use WWE’s content globally across its streaming and legacy media assets (most notably the US and India), build its presence within its theme parks and sell merchandise around the world as only Disney can.”
Last Tuesday, WWE co-CEO Stephanie McMahon — also Vince McMahon’s daughter — resigned from her role, leaving Nick Khan as the sole CEO of the company.
With additional reporting from Brian Sozzi
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