Rosenblatt Securities initiated coverage on World Wrestling Entertainment, Inc. (NASDAQ:WWE) with a "buy" rating and an $85 price target -- a 27.4% premium to last night's close. The brokerage firm said the entertainment name is an attractive target for those looking to trade the "content is king" theme, and sees a compelling entry point following WWE stock's recent pullback.
Looking closer, the shares have shed 34% since topping out at a record high of $100.45 in late April. And since a late-July rejection in the $78-$76 region -- a ceiling in recent months -- WWE stock is down 16%. Today, the equity is off 0.8% at $66.16 amid stiff broad-market headwinds.
Despite these technical troubles, analysts remain enamored with World Wrestling Entertainment. In fact, Rosenblatt joined seven other brokerage firms with its "buy" rating, compared to just one "hold" recommendation, and not a single "sell." Meanwhile, the average 12-month price target sits all the way up at $97.50.
This bullish bias is seen in the options pits, too. The October 75 call and 60 put are home to peak WWE open interest, and it looks like one speculator used the options to initiate a synthetic long strategy in late July when the shares were trading near $68.50.
Shorter-term traders have targeted the August 80 call, and data from Trade-Alert points to buy-to-open activity here. If this is the case, the call buyers' goal is for WWE stock to break out above $80 by expiration at the close this Friday, Aug. 16.