On Monday, Deutsche Bank (ETR:DBKGn) updated its outlook on Liberty Media (NASDAQ:FWONA) Corp-Liberty Formula One (NASDAQ: FWONA), increasing its price target to $73 from the previous $65, while retaining a Hold rating on the stock. The adjustment is attributed to revised higher earnings before interest, taxes, depreciation, and amortization (EBITDA) and free cash flow (FCF) estimates.
The new price target suggests a valuation of 19 times the anticipated 2025 enterprise value to EBITDA (EV/EBITDA) and a 4.5% yield on unlevered free cash flow (UFCF) for the year 2025. Deutsche Bank's analysis highlights Formula One's solid positioning within its market, noting the company's promising growth prospects and sustainable cash flow generation.
Despite the positive outlook on the business fundamentals, the analyst indicates that the growth narrative appears to be fully reflected in the current stock price. As a result, there is a limited expectation for an increase in the stock's multiple. This perspective has led to the continuation of a Hold rating, suggesting that the stock is currently valued appropriately in light of the anticipated financial performance.
The bank's stance on Liberty Media Corp-Liberty Formula One is based on the company's financial trajectory and market position. Investors are provided with an updated valuation framework that projects forward to the year 2025, offering a long-term view of the company's financial health and investor returns.
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