Market Overview

Benchmark Upgrades WWE, Sees Improving Engagement Metrics Ahead

Share:
Benchmark Upgrades WWE, Sees Improving Engagement Metrics Ahead

Despite a mixed second quarter, World Wrestling Entertainment, Inc. (NYSE: WWE) is up more than 10% following Thursday's earnings print. WWE’s quarter also inspired an analyst upgrade.

The Analyst

Benchmark analyst Mike Hickey upgraded WWE from Hold to Buy and set a $90 price target for the stock.

The Thesis

In the note, Hickey said WWE’s second-quarter numbers and guidance were good enough to suggest significant upside for the stock.

WWE reported a 5% drop in revenue in the second quarter, including declines in media, live event and consumer products sales. “Raw” ratings were down 14% in the second quarter, while “SmackDown” ratings dropped 11%. The WWE Network subscriber count fell 6%, and North American live event attendance dropped 2%.

“We are now optimistic the firm’s engagement metrics should continue to recover, potentially benefiting from the new distribution agreement with Fox (33% more HHs than USA), WWE Network re-launch, return of talent/reset storylines and new executive leadership at both Raw and Smackdown,” Hickey wrote in the note.

Hickey said upcoming U.S. distribution agreements, $500 million in authorized share buybacks and a multi-month sell-off in WWE shares heading into earnings created a buying opportunity for investors.

Hickey is projecting fiscal 2020 revenue of $1.208 billion on OIBDA of $403 million. Both numbers are below consensus analyst estimates of $1.297 billion and $436 million, respectively.

Hickey said new deals in India and the Middle East and North Africa could be additional catalysts.

Price Action

WWE's stock traded higher by 3.3% to $77.17 on Friday.

Related Links:

WWE Goes Back To The 'Attitude Era' To Try And Freshen Up Sagging TV Ratings

Turner Sports Is Getting Back Into The Wrestling Ring

Photo credit: InFlamester20, Wikimedia

Latest Ratings for WWE

DateFirmActionFromTo
Feb 2020DowngradesOverweightNeutral
Feb 2020DowngradesOverweightUnderweight
Feb 2020DowngradesOutperformPeer Perform

View More Analyst Ratings for WWE
View the Latest Analyst Ratings

Posted-In: Benchmark Mike Hickey Monday Night RawAnalyst Color Earnings Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (WWE)

View Comments and Join the Discussion!
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com