Needham & Company Reiterates Buy on World Wrestling Entertainment (WWE)
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Needham & Company reiterated a Buy rating and $25.00 price target on World Wrestling Entertainment (NYSE: WWE) ahead of the company's 3Q earnings report. Needham adjusted Corporate Expenses by 7% to better reflect FY16 run rates, as certain episodes aired in 3Q15 that are not expected to be aired in 3Q16 or 4Q16, which lowers TV license fee revenue.
Analyst Laura Martin commented, "We lower our 3Q16 revenue estimate to shift growth in the Television division to reflect license fee income moving from 3Q16 to 4Q16 as the date of airing is being pushed back. In addition, certain episodes aired in 3Q15 that are not expected to be aired in 3Q16 or 4Q16, which lowers TV license fee revenue. Offsetting this, we are lowering Corporate Expenses by 7% to better reflect FY16 run rates. Together, we lower our 3Q16 revenue estimate to $164.2mm (down 1% y/y, 8% below previous estimates), but raise our OIBDA estimate to $26.2mm (up 12% y/y, 1% above our prior estimate). We maintain our EPS from Continuing Operations estimate of $0.16 (up 20% y/y). During 3Q16, we estimate that WWE had an average of 1.49mm paying OTT Network subscribers, down from an average of 1.52mm in 2Q16. We maintain our Buy rating and $25 Target Price."
Shares of World Wrestling Entertainment closed at $21.30 yesterday.
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