By Michael Elkins
Wells Fargo upgraded World Wrestling Entertainment (NYSE:WWE) to an Equal Weight rating (from Underweight) and raised the price target to $100 (from $52) after researchers decided that their prior negative thesis around TV rights renewals is unlikely. Analysts there believe that WWE’s strategic process has a reasonable probability of success.
WWE is running its next U.S. rights negotiations in parallel with strategic alternatives, including a potential sale of the company. The analysts wrote in a note, “WWE, with Vince McMahon back as Chairman, has to watch the clock as it looks to simultaneously drive pricing in renewals and sell the company. We see modest upside potential, hence our Equal Weight rating."
WWE is running its U.S. Media rights negotiations alongside a potential sales process. Exclusive negotiations were set to begin with incumbents FOX and USA Network (CMCSA) around April ’23, but Wells Fargo thinks the potential sales process has pulled the timeline forward.
Founder and controlling shareholder Vince McMahon rejoined the company in early January ’23, effectively starting the sales process. There are several reported strategic and financial buyers, which the analysts believe puts a floor on the stock. CNBC has reported that the sales process is expected to run three to six months. If no sale arises, the analysts think there could be downward pressure on the shares.
Shares of WWE were down 0.02% near mid-day trading on Tuesday.