Needham sees ‘best case’ where Amazon buys WWE, cuts target to $55 in meantime

Needham analyst Laura Martin lowered her price target on WWE (WWE) shares to $55 from $80 after the company reported Q4 revenue and adjusted EBITDA that were below her estimates and cut her 2020 EBITDA estimate to $250M from $385M based on updated management guidance. However, she thinks the recent correction in the stock has been overdone and she keeps a Buy rating on shares of the sport-entertainment company, which she notes is exploring a “transformative” deal based on selling its OTT content rights to the highest bidder. If the OTT Network content is “sold,” she believes the bidder will also be the most likely ultimate buyer of WWE. In her “best case” scenario, Amazon (AMZN) would buy out all of WWE’s U.S. and offshore rights for WWE’s OTT Network, which she contends would put Amazon in the best spot to purchase all of WWE, whenever the McMahon family is ready to exit.