Benchmark Downgrades World Wrestling Entertainment (WWE) to Hold

(Updated - May 16, 2014 7:36 AM EDT)

Benchmark downgraded World Wrestling Entertainment (NYSE: WWE) from Buy to Hold with a price target of $19.96 (from $29.12) following the company's new TV deal with NBCui which he said disappointed investors given limited visibility/believability on the ultimate success of the Network.

In they report entitled "To all my little Hulkamaniacs, say your prayers, take your vitamins and you will never go wrong." --Hogan" analyst Mike Hickey said, "The Company's valuation could take a heavy beating this morning, as the new domestic TV deal with NBCu likely disappointed investors over limited visibility / believability on the ultimate success of the Network. Our investment foundation for the Company’s anticipated OIBDA acceleration has transitioned from a 2X increase in domestic TV rights fees over an option for incremental OIBDA from the WWE Network, to the necessity for the Network to provide the main driver for believed OIBDA growth. The initial subscriber number from the Network disappointed investors, and we have received limited visibility to where subscribers are currently tracking or where churn will ultimately settle; an uncomfortable silence that will likely extend until early August. We remain optimistic for the global success of the WWE Network, but consider the OIBDA growth shift to the Network as an unfavorable risk rebalance over the near term."

"Our valuation methodology is a standard DCF model (3% TGR / 8.4% COC) over a 20% family controlled valuation discount, which generates a $19.96 price target (reduced from $29.12) and Hold rating (reduced from Buy)," he added.

For an analyst ratings summary and ratings history on World Wrestling Entertainment click here. For more ratings news on World Wrestling Entertainment click here.

Shares of World Wrestling Entertainment closed at $19.93 yesterday.

You May Also Be Interested In

• Morgan Stanley Double Downgrades AU Optronics (2409:TT) (AUO) to Underweight
• JPMorgan Downgrades Hanwha Solutions Corp (009830:KS) to Neutral
• Spotify (SPOT) PT Raised to $396 at Rosenblatt