Shares of World Wrestling Entertainment Inc. WWE, +1.64% rallied 1.9% toward a record high in morning trade Tuesday, bucking the sharp selloff in the broader market, after Morgan Stanley turned bullish on the company, citing an upbeat outlook for revenue growth and margins. Analyst Benjamin Swinburne raised his rating to overweight from equal weight, and boosted his stock price target by 74% to $40, which is 15% above current levels. Swinburne said the battle for eyeballs across TV and online has led to a rapid increase in content spending, particularly in the area of sports rights, which should accelerate WWE's revenue growth over the next 2-to-3 years. And as WWE's costs continue to grow at a "controlled pace," Swinburne expects the increased revenue to boost margins and operating leverage. In addition, he believes WWE represents "a potentially interesting strategic asset in a rapidly consolidating media landscape." While WWE's stock rallied, the S&P 500 SPX, -0.78% fell 0.8% in morning trade. Over the past three months, WWE shares have shot up 38%, while the S&P 500 has gained 10%.
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