Liberty Media’s Formulation One Group takes the “pole position” for TD Cowen’s greatest concepts in 2024. Regardless of considerations that curiosity in Formulation One is reaching a ceiling, in addition to rising fragmentation in sports activities broadcasting rights, the agency thinks the corporate is not being correctly acknowledged by traders. “We view FWON as a capital-light royalty on the growth [and] monetization of a premium global sports league,” analyst Stephen Glagola wrote in a Wednesday word. The corporate’s contracted income and variable value construction supplies low execution danger and resilience towards potential weaknesses in shopper spending, he added. TD Cowen has a $90 value goal on Formulation One, implying 60% upside potential from Tuesday’s shut. Glagola famous that Formulation One stays underpenetrated within the U.S. market regardless of 19% year-over-year TV subscription development from January by way of October. Race attendance traits in North America had been additionally constructive in 2023 from the earlier yr, he added. Moreover, the corporate’s “highly contracted” income and its variable value construction additionally minimizes execution danger and protection towards a possible financial pullback, Glagola mentioned. He forecasts extra catalysts subsequent yr with the return of the China Grand Prix for the primary time since 2019. General, there can be 24 Formulation One races in 2024 in comparison with 22 in 2023, and revenue from the Las Vegas Grand Prix ought to rise from 2024 onwards, mentioned Glagola. “We expect favorable structural tailwinds including market power in national content distribution negotiations and increasing demand for scarce sports assets ongoing for premium sports owners for the foreseeable future,” Glagola mentioned. Class A shares are up almost 10% yr up to now. —CNBC’s Michael Bloom contributed to this report.
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