Bank of America raised the rating of Liberty Media Formula One shares from Neutral to Buy on Wednesday, citing the company's sustainable business model, long-term monetization potential, and favorable risk-reward ratio at current valuations.
Analyst Brent Navon maintained the target price of the shares at $105.
He noted that in the context of an unstable macroeconomic and geopolitical situation, the highly predictable revenue streams of Formula 1 make the company outstanding in the media and entertainment sector.
In the context of an unstable macroeconomic and geopolitical situation, we believe that there is a premium for highly resilient and predictable business models, such as FWONK,” wrote Navon.
BofA also noted the relative protection of Formula 1 from the influence of artificial intelligence as a positive factor, pointing out that live broadcasts of sports events are less susceptible to the risks of disintermediation by AI compared to other segments of the media ecosystem.
The cancellation of races in Saudi Arabia and Bahrain due to the conflict in the Middle East prompted BofA to lower its revenue forecast for 2026 by $191 million, and adjusted OIBDA by $80 million, although the bank left its forecast for 2027 unchanged, characterizing these disruptions as one-time events.
Navon pointed to the acquisition of MotoGP as a long-term opportunity, noting that Formula 1 monetizes media rights nearly five times more efficiently than MotoGP, promotes races six times better, and sponsorship ten times.
BofA also noted the potential for capital return by 2027, estimating that FWONK could buy back shares for about $2 billion using excess free cash flow.