11:32 AM EDT, 08/07/2025 (MT Newswires) -- TKO Group's ( TKO ) integration of WWE continues to outperform expectations, pushing its margins to exceed pre-merger levels, Morgan Stanley said in a Thursday note.

According to Morgan Stanley, WWE's new ESPN deal implies a 12.5% compound annual growth rate off the existing agreement, while allowing WWE to keep and monetize its library and NXT Premium Live Event and optimize production costs.

The investment firm also said it expects a new UFC rights agreement in the US starting in 2026.

"We remain bullish on sports assets, in particular those that generate recurring revenues with high free cash flow conversion," Morgan Stanley said.

Morgan Stanley raised its price target to $165 from $160, while reiterating an equalweight rating on the stock.

Price: 159.90, Change: +4.29, Percent Change: +2.76