Citi opens ‘positive catalyst watch’ on TKO after judge blocks UFC settlement

Citi opened a “90-day positive catalyst watch” on shares of TKO Group while keeping a Buy rating on the name with a $130 price target. The analyst cites the potential for a new settlement to be reached between the Ultimate Fighting Championship and its fighters, prior to the trial date in October, after Judge Boulware last night denied the settlement for both the Le and Johnson cases for the watch catalyst. On the back of this news, TKO shares traded down to $106 implying the market sees $1.2B of potential value at risk, the analyst tells investors in a research note. Citi still sees scope for the two parties to reach a new settlement that is larger than the original settlement of $335M but less than what the Street has priced in.