By Senad Karaahmetovic
Wolfe Research analysts downgraded World Wrestling Entertainment (NYSE:WWE) to Peer Perform from Outperform, pushing shares lower in pre-market Tuesday trading.
WWE stock is up about 25% since late December when it first emerged that Vince McMahon, the founder and majority shareholder of the business, will return to lead the company. Despite the positive stock reaction, analysts argue that McMahon’s return and Stephanie McMahon’s resignation as co-CEO add risk.
“Adding to our perception of instability is the return to the Board of Directors of prior Co-Presidents George Barrios and Michelle Wilson who resigned in Jan. '20. Stephanie McMahon's resignation and the Board's formal resistance to Vince's return indicate serious stress,” analysts wrote in a downgrade note.
They see Stephanie’s resignation as either a “strong rebuke of her father's decision or a desire to extricate her WWE equity stake from the "double trigger" vesting commitment of her employment agreement.”
“1) is bearish, while 2) is bullish,” the analysts added.
In addition to the downgrade, they also removed the $111 per share price target on WWE stock.
WWE stock is down nearly 0.5% in pre-market Tuesday.