Benchmark analysts raised their price target for Formula One Group (FWONA) stock to $81 from $77 in a note Friday, extending the realization to 2025 and maintaining a Buy rating on the stock.
"The disciplined price target is off Benchmark's growth relative to S&P 500 discounted cash flow approach and does not assign any discrete premium to F1's sports scarcity value," explained the firm.
Despite some financial results falling short of expectations, Benchmark maintains its bullish rating for the stock.
They note that the recent performance of Formula 1 has been highlighted by increasingly competitive races, with seven different winners from four teams across fourteen races in 2024.
This has driven significant fan engagement, resulting in 3.7 million attendees and record attendance at events like the Canadian Grand Prix. Additionally, TV viewership has surged in key markets including the U.S., China, Australia, Canada, South Africa, and the Middle East, with five U.S. races achieving record viewership.
However, Benchmark notes that the financial results were mixed. Formula One Group's revenues, including effects from the Quint acquisition, grew by 36% to $988 million, slightly below Benchmark's estimate of $1.01 billion. Adjusted OIBDA (EBITDA) increased by 17% to $165 million, missing the consensus estimate of $227 million.
Excluding Quint, F1 operating revenues rose 20% to $871 million, with a modest 3% increase in Adjusted OIBDA.
Benchmark says Liberty Media (NASDAQ:FWONA) is also addressing regulatory challenges, including a DOJ investigation into the rejection of Andretti Global as an 11th team.
The firm adds that despite these hurdles, Liberty Media CEO Greg Maffei expressed confidence that F1 has not violated any antitrust regulations.
Meanwhile, Benchmark notes that the MotoGP transaction is progressing well, with regulatory approvals expected to finalize by year-end.