The surprise merger announcement between the PGA Tour and the Saudi Arabia-backed LIV Golf league sent shockwaves through the sports world on Tuesday, and could have big implications for two golf stocks, according to Jefferies. As part of the deal, the Saudi Public Investment Fund (PIF) is prepared to invest billions into the new golf league, CNBC’s David Faber reported Tuesday. Jefferies analyst Randal Konik said in a note to clients on Tuesday that the combined league and additional cash should boost golf’s growth. “We believe that this unexpected agreement holds immense potential to elevate the sport of golf to new heights. By joining forces, this combined entity can harness their collective resources, capital, and expertise to generate heightened attention and overall interest in the game. The infusion of capital from PIF signifies a strong commitment to the growth and promotion of golf on a global scale,” Konik wrote. Two companies that could stand to benefit from more interest in golf are Topgolf Callaway Brands and Acushnet Holdings , the parent company of Titleist. Those stocks rose 5.5% and 4.5% respectively, on Tuesday after the deal was announced. Jefferies highlighted both stocks as potential beneficiaries of the deal, but said that Topgolf Callaway has more “asymmetric upside potential.” — CNBC’s Michael Bloom contributed to this report.
