World Wrestling Entertainment Inc. shares have been climbing since last week, when it signed new five-year deals with Comcast Corp.’s USA Network and 21st Century Fox’s Fox Sports. But analysts at BTIG Research say the stock still has ample room to run, raising their price target to $92 from $75, or 21% above its current level.
Under the new deals, “WWE SmackDown Live” will air on Fox FOXA, -0.08% while “RAW” will continue showing on USA Network, which is owned by NBCUniversal, a subsidiary of Comcast Corp CMCSA, -0.14% The two programs currently air on USA Network. The deal more than tripled the fees WWE WWE, +0.97% was receiving before.
“We view WWE among the safest plays in media now,” wrote analysts at BTIG Research, led by Brandon Ross. “We also believe there will be several secondary benefits from the rights deal that remain underappreciated by investors, driven by the broad exposure the brand will receive on Fox broadcast and WWE’s ability improve its capital structure, offering investors meaningful capital return.”
BTIG expects “significant promotion” from Fox Sports, especially during Sunday and Thursday night NFL games. “We believe there is a high likelihood that exposure generated by Fox could boost the rest of WWE’s business,” Ross wrote.
Analysts at BTIG also have strong expectations for WWE internationally. WWE should complete new deals in three of its top seven markets for ‘Raw’ and ‘Smackdown’ in the next several months, and BTIG is most bullish on the company’s prospects in India. WWE is the second-most watched sports program in the country, following India Premier League cricket.
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“Growth in demand for original content in the market is exploding, as wired and especially wireless broadband infrastructure proliferates,” Ross wrote of India.
Adding to BTIG’s positive outlook: Analysts think the fight for WWE rights in India will be “extremely
competitive.” Star, which is owned by Fox, and Sony SNE, +0.49% are racing for content rights in the market, and Facebook FB, +0.52% and Amazon AMZN, +0.14% have previously indicated India as a strategic market.
WWE shares have shot up 146.5% so far this year, while Fox shares have risen 41.1%% and Comcast shares have dipped 17.3%. The S&P 500 SPX, +0.15% has risen 2.4%.
