Home / Markets News & Opinions / Manchester United Stock is Wall Street’s Darling as Sport Returns

Manchester United Stock is Wall Street’s Darling as Sport Returns

Last Updated September 23, 2020 1:59 PM
Simon Chandler
Last Updated September 23, 2020 1:59 PM
  • Jefferies analyst Randal Konik has tipped Manchester United stock (NYSE: MANU) as the sports stock most likely to benefit from a post-lockdown economy.
  • MANU has fallen by 16.56% in the year to date, but the company was doing well prior to lockdowns.
  • With English soccer resuming on June 17, now could be the best time to buy MANU stock.

Jefferies has picked Manchester United as its “best-in-class” sports stock. Looking towards a post-lockdown economy, the New York-based asset management company predicts MANU stock will rise higher than its peers.

That said, Manchester United declared a loss of 20.2% during FQ3, compared to the previous year. It has also fallen by around 16.56% over the year to date, while the S&P 500 has fallen by 5.77%.

Manchester United manager Ole Gunnar Solskjær is reviving the club’s performance on the pitch. | Source: Joan Monfort / AP Photo / NTB scanpix

Still, Manchester United has surpassed analyst estimates in two of the past four financial quarters. So if the return of sport is permanent, then it could very well beat analyst expectations again.

Manchester United Stock: ‘Best-In-Class Brand Of World’s Most Popular Sport’

Wall Street traders and analysts are gearing up for normal service to resume in the global economy and on the stock market.

One of the first movers in this direction will be sport, with the English Premier League resuming on June 17 . Other soccer leagues, such as the German Bundesliga , have already restarted.

In terms of sports and soccer stocks, Manchester United is one of the biggest. And according to Jefferies analyst Randal Konik, it will be one of the best performers in a post-lockdown economy.

What’s clear to us is MANU remains a best-in-class brand in the world’s most popular sport, and that creates significant monetization opportunities that will only strengthen LT.

In fact, Konik foresees sport becoming more important and more lucrative in a post-pandemic landscape. And with Manchester United being one of the strongest sports franchises worldwide, he expects MANU stock to ride this wave.

MANU is one of the most popular and successful global brands in the world, with unparalleled reach benefitting from a changed media landscape where live content is increasingly valuable.

Fundamentally, with “global sport continuing its rise,” and with MANU’s on-field performance improving and its fundamentals “solid and predictable,” Jefferies would buy its stock.

Falling Revenues

Of course, this ‘buy’ recommendation from Jefferies doesn’t tell the whole story when it comes to Manchester United stock.

The pandemic and lockdown has hit MANU hard. At the end of last month, Manchester United posted its report for fiscal Q3 2020 . Ending on March 31, this quarter saw the team’s revenues fall by 20.2% year-on-year, to $157.94 million.

With football in England due to take place behind closed doors for some time to come, Manchester United is likely to see reduced revenue for a while.

This is reflected in the MANU price, which has fallen by 16.56% in the year to date. By comparison, the S&P 500 and Dow Jones have fallen by 5.77% and 11.06%, respectively.

Manchester United stock versus S&P 500 and Dow Jones
Manchester United stock (dark blue) versus the S&P 500 (light blue) and Dow Jones (purple). ⎮ Source: Yahoo! 

At the same time, MANU earnings per share declined in Q3 2020 to -$0.06 , representing a 700% fall in relation to estimates. However, MANU’s EPS surpassed estimates for the two previous quarters.

Manchester United Stock Earnings Per Share
Manchester United stock earnings per share, with estimates on the second column from right. | Source: Nasdaq 


As such, the return of sport could indeed return Manchester United stock to where it was prior to lockdowns. Compared to other sports stocks listed on the NYSE, Manchester United is already doing better this year.

Manchester United stock versus other sports stocks
Manchester United stock (dark blue) versus MSG (light blue, owners of New York Knicks and New York Rangers), BATRK (purple, owners of Atlanta Braves) and RCI (red, owners of Atlanta Blue Jays). ⎮ Source: Yahoo! 

Of course, with the threat of second spikes, it’s just not certain how quickly Manchester United stock will rise. But assuming that sport doesn’t reenter lockdown, MANU could do very well across the rest of the year.