Thursday, 18 April 2024

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Evercore ISI downgrades Endeavor stock ahead of Silver Lake acquisition By

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On Wednesday, Endeavor Group Holdings Inc (NYSE:EDR) stock, a global entertainment, sports, and content company, was downgraded by Evercore ISI from Outperform to In Line. The firm also adjusted Endeavor’s price target to $27.50 from the previous $28.00.

This change comes as Endeavor enters a definitive agreement to be acquired by private equity firm Silver Lake, along with Endeavor’s management team and additional investors. The deal values the company at a total equity value of $13 billion.

According to the announcement, Silver Lake will acquire all outstanding shares of Endeavor it does not currently own or any rolled interest at a price of $27.50 per share. This acquisition follows Endeavor’s exploration of strategic alternatives announced in October and Silver Lake’s expression of interest in taking the company private. The anticipation of this transaction has been in the public domain since Endeavor and Silver Lake’s disclosures last year.

The analyst from Evercore ISI noted that the transaction was largely expected and that they believe the deal will successfully close. The revised price target reflects the pending take-private deal and is aligned with the offer price for Endeavor’s shares. The downgrade to In Line is a response to the recent share price movement and the narrow gap between the current market price and the offer price.

The take-private agreement is a significant move for Endeavor, shifting its status from a publicly traded entity to a privately held company. The acquisition price of $27.50 per share represents a full buyout of the company’s equity, solidifying the value of the transaction at $13 billion.

The firm’s rating adjustment and the new price target are immediate reactions to the unfolding events, providing a current perspective on the company’s market standing.

InvestingPro Insights

Endeavor Group Holdings Inc’s (NYSE:EDR) latest market movements and financial metrics provide investors with a clearer picture of its current valuation and performance. With a market capitalization of $12.04 billion and a P/E ratio of 21.76, the company shows signs of a stable investment. An important metric to consider is the PEG ratio, which stands at 0.14 for the last twelve months as of Q4 2023, indicating potential undervaluation relative to near-term earnings growth.

Two noteworthy InvestingPro Tips for Endeavor include the company’s liquid assets exceeding short-term obligations and its operation with a moderate level of debt. These…

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