Analyst Stephen Glagola of TD Cowen maintained a Buy rating on Liberty Media Liberty Formula One (FWONA), with a price target of $90.00.
Stephen Glagola has given his Buy rating due to a combination of factors surrounding Liberty Media Liberty Formula One (FWONA). The company is positioned in a defensive manner with a business model that includes highly contracted revenues and a flexible cost structure.
This is complemented by expanding operating income before depreciation and amortization (OIBDA) margins, which are expected to leverage team payment agreements.
Furthermore, Glagola anticipates a growing levered free cash flow yield, from an estimated 4.3% in 2024 to 6.6% by 2027, indicating under appreciation by the market of the potential for improved asset utilization and the opportunity for greater monetization, especially of the underutilized media rights in the United States.
Additionally, Glagola projects an annual compounded growth rate of adjusted OIBDA at 16.0% from 2022 to 2027, which surpasses the consensus estimate.
He expects a significant expansion in the operating company’s OIBDA margin, driven by the leverage on team payments as per the 2021 Concorde Agreement.
Moreover, Glagola addresses investor concerns regarding the sustainability of sports rights and the interest in the U.S., highlighting recent audience growth, attendance trends, and subscription increases for F1 TV in the U.S.
He also points to the underpenetration of U.S. media rights for FWONA, suggesting room for growth, and anticipates positive catalysts such as a successful Las Vegas Grand Prix and the potential for increased race-related revenues and sponsorship activations in the future.