"A recent decline in the share price has led to a more attractive valuation and greater total return prospects, in our view," analyst Jeffrey Thomison wrote in a note to clients Monday.
Thomison said he was "mostly pleased" with the company's first-quarter results, posted May 6, although "some lower television ratings and the decline in online traffic warrant further attention."
The company reported first quarter earnings of 27 cents a share, in line with the mean estimate of analysts polled by Thomson Reuters.
Overall, growth drivers such as international expansion, digital media opportunities, and improvements in core businesses such as pay-per-view have all provided encouraging data that validate their respective roles in the company's future growth, Thomison said.
"We believe professional wrestling has a long-term, proven history as a form of entertainment," he said. World Wrestling Entertainment "has accomplished a tremendous amount as the leader in this sector of the overall entertainment industry."
Thomison's 12-month price target of $19 assumes low double-digit growth in earnings and a stock valuation of 20 times forward earnings. He estimated 2008 revenue of $537 million and saw 2008 earnings of 94 cents a share on revenue of $682 million.
The stock was trading up 4.8% at $16.86. Brigid Gaffikin bg/vj
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