Bernstein lifts TKO target in early 2027 preview

Investing.com -- Bernstein lifted its price target on TKO Group, the owner of UFC and WWE, to $240 from $235 in a note Wednesday, publishing what it called a "way-too-early" preview of 2027.

Analyst Ian Moore, who rates the stock Outperform, described TKO as "the most controversial name in our coverage," with debate centered on whether partnership execution, live demand and media escalators can deliver stronger-than-expected growth or just around 6% EBITDA growth.

Moore said UFC and WWE growth should carry high incremental margins of 80% to 90%, helped by media rights escalators and sponsorship execution, though live events growth could prove muted and IMG faces a $100 million-plus headwind as it laps the Milan Olympics and the FIFA World Cup.

The analyst said his estimates imply about 9% EBITDA growth is achievable, but he expects management to guide to 7% to 8%, or about $2.45 billion.

He remains focused on the sponsorship opportunity for UFC and WWE, and sees a clean path for a 2030 target to be lifted toward $1.3 billion to $1.4 billion.

"2027 will be a pivotal year for TKO's operating leverage story," Moore wrote, with the major synergy phase largely complete and top-line growth set to flow through a leaner structure, lifting margins to a modeled 42% from 39%.

The $240 target reflects an extra $10 a share for TKO's Zuffa Boxing and implies about 21 times 2027 EBITDA. Moore said he sits $145 million above consensus for 2027.

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