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Investing.com -- Bank of America initiated coverage of Liberty Formula One Group with a Neutral rating and a $110 price target saying after years of strong execution and rising valuations, there is a balanced risk-reward.
“While F1’s business remains on a positive earnings growth trajectory, we believe the catalyst path is somewhat limited from here,” analysts at BofA said.
The analysts noted Formula One’s appeal as a premium global sports asset, calling it a "trophy IP" with strong commercial rights, contracted revenues, and high margins.
Shares have climbed steadily under Liberty Media’s ownership, with Formula One’s operational revenue growing at an 11% compound annual rate since 2019.
BofA values FWONK at around 31 times its 2026 free cash flow estimate, a premium to traditional media and entertainment peers.
The multiple reflects the scarcity of high-quality sports IP and the predictability of F1’s business model, which includes race promotion, sponsorship, and media rights with built-in escalators.
Still, BofA believes most of the monetization upside is already reflected in the share price.
The firm cited limited catalysts in the near term, noting that opportunities in sponsorship and race expansion are now well understood.
It also pointed to recent reports of Apple (NASDAQ:AAPL) acquiring U.S. broadcast rights for $150 million annually, suggesting a renewal-driven boost is unlikely.
While the recent acquisition of MotoGP could open new growth avenues, BofA said F1’s multiple may struggle to expand further without fresh drivers of upside.
The business remains healthy, but the stock may be idling for now, according to analysts at BofA