Analyst: WWE's Big Run Will Continue

World Wrestling Entertainment, Inc. WWE has been one of the few bright spots for investors in 2018, and one Wall Street analyst said Friday WWE’s big run should continue in 2019.

The Analyst

MKM Partners analyst Eric Handler reiterated his Buy rating and $95 price target for WWE.

The Thesis

Handler wrote in a note that a recent meeting with WWE management suggests the company has multiple growth levers in coming years. Handler says TV contract renewals in the U.S., UK and India, new WWE Network initiatives coming in 2019 and long-term international expansion opportunities make WWE stock one of the firm’s best investment ideas.

Handler said management had nothing to report on the ongoing UK TV deal negotiations but noted that body language seemed confident. MKM said the UK deal may be announced early in 2019 and should be worth roughly 50 percent more than the current deal, valuing the new five-year contract at about $255 million.

Handler said now that WWE has a well-established product in India, it has more leverage in its renewal negotiations. MKM is projecting a 150 percent increase in WWE’s five-year India contract, valuing the deal at about $375 million.

At home in the U.S., Handler said WWE should begin experimenting with tiered content in coming years and could also add additional languages and a potential download feature as well.

Finally, Handler said WWE will likely push to add and monetize its international users, which currently represent 70 percent of total viewing time but only 30 percent of revenue.

Price Action

WWE trades around $73.33 per share and is up 135 percent year-to-date.

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