World Wrestling Entertainment, Inc. (NYSE: WWE) stock is showing no signs of slowing down, gaining another 4.9 percent on Thursday following its massive U.S. TV deals announced earlier this week. WWE stock is now up 266 percent in the past year, but analysts say there is likely more good news on the horizon for investors.
KeyBanc analyst Evan Wingren says WWE’s new TV deals with Comcast Corp. ( CMCSA) subsidiary NBCUniversal and Twenty-First Century Fox ( FOXA) do a lot more good for WWE than simply adding to its bottom line. The fact that the new U.S. TV deals exceeded even the most optimistic estimates bodes well for the company’s international renewals.
“Near term, we continue to believe there is room for upside in a bullish scenario for its U.K. and India renewals,” Wingren says.
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The new U.K. TV deal is likely coming in the second half of 2018, while the India TV deal will be announced in the first half of 2019.
In the longer-term picture, Wingren says revenue from the U.S. TV deals can be put to work by WWE to explore other content opportunities.
“After successfully going through its core content rights renewal, we believe WWE will have the ability to pursue accelerating sponsorship and new content opportunities that may have required incremental investment, or even leverage, that would have been too risky to undertake in front of transformative renewals,” Wingren says.
Wingren says WWE can explore how best to further monetize its huge social media presence and its growing data and analytics business.
Three to five years down the line, Wingren says WWE will still have plenty of growth opportunities in the international market as it adds to its local brand investments. He says WWE could also potentially increase its pricing power by introducing tiered WWE Network subscriptions.
For now, Wingren says WWE stock will likely maintain its positive momentum as long as the company delivers positive subscriber growth trends.
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WWE stock may seem expensive after more than tripling its share price in less than a year, but Wingren says the company’s data capabilities, its lack of exposure to traditional media risks, its niche audience and its social media following make it a unique asset within the media space and warrant a premium valuation for its stock.
KeyBanc has an “overweight” rating and $85 price target for WWE stock.
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There’s More Good News for World Wrestling Entertainment, Inc. (WWE) Stock originally appeared on usnews.com
