EDR - BofA starts Endeavor Group at Buy expecting UFC strength

Endeavor Group Holdings ( NYSE: EDR ) is slightly higher in a mixed stock market following an initiation at a Buy rating by BofA Securities, calling it a "counter puncher" based on its key catalyst: the Ultimate Fighting Championship.

"The media landscape is rapidly evolving," analyst Jessica Reif Ehrlich says, adding Endeavor's assets put it in good position to take advantage of a number of secular tailwinds: rising premium sports rights fees

Prominent among those, though is the U.S. media rights deal for UFC, she said. "Supported by scarcity of highly engaging live sports content, as well as its own growing popularity, we believe the UFC will command a significant increase in rights fees upon renewal in 2026."

ESPN and Disney ( DIS ) currently hold the rights, and the company has suggested that UFC is driving ESPN+ subscriptions, she noted. ESPN's current deal is estimated at an average annual value of $500M, but hefty demand for premium sports should bring multiple additional bidders, with Reif Ehrlich estimating a 2x step-up in average annual value for the base case (and 2.5x in the bull case).

Doubling that value could bring an incremental $240M in revenue for 2026, parsing out to an incremental $6 per share in valuation, she said.

The shares are at an attractive entry point as well after the market correction. BofA has a price target of $28, currently implying 19% upside.

A recent amendment of Endeavor's purchase agreement for the OpenBet business means that it will pay $750M in cash and $50M in stock; that transaction is expected to close by the end of the third quarter, another near-term catalyst .

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