World Wrestling Entertainment (WWE) Decline Called 'Unreasonable'

World Wrestling Entertainment (NYSE: WWE) stock declined after it announced Monday that WWE Network has 667,2871 subscribers.Commenting on developments, analyst Robert G. Routh of National Alliance called the drop "more than unreasonable."

"Although the initial subscriber numbers were more than solid and in line with our published estimates, the stock got hammered yesterday in the public markets. We think more than unreasonably especially in light of near term catalysts such as the new US TV rights deal presenting a real near term opportunity for investors," said Routh.

"We think when WWE announces the new deal for US TV rights later this month, procuring two to three times what they currently receive for those rights is highly probable due to the ratings WWE shows consistently get. Basic cable networks need to hold eyeballs now more than ever and since WWE content has proven the ability to do this it would seem paying a multiple of the current rate for those rights is hardly asking too much. The risk to cable network valuation seems to great relative to the cost in our opinion. We think Viacom’s MTV Networks, NBCU, AMCX, Time Warner (who used to own WCW and owns the Turner Networks) as well as Disney and Fox are likely interested in what WWE has to offer. The real question is who will get the rights to WWE programming and how will any such deal be structured?," added the analyst.

National Alliance Securities has a Hold rating on World Wrestling Entertainment.

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 $23.90 yesterday.

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