As the Formula One season goes through its summer break, analysts believe there’s upside ahead for the motorsport league’s parent stock. Liberty Media Formula One reported second-quarter results on Thursday, with revenue falling nearly 40% year over year due to the cancellation of several races due to conflict in the Middle East. Still, the stock rose nearly 4% on the day as the company noted that it remains “active in [media rights] negotiation and renewals, recently renewing with the surface TV industry in a multi-year agreement.” Spending in sports, as well as viewership, has broadly remained resilient despite rising inflation. The 2026 FIFA World Cup was the most-viewed sporting event of the year and generated a record-setting $15 billion in revenue . Shares of other sports entertainment companies are also higher. TKO Group Holdings , the company responsible for UFC and WWE, is up 16% in the past 12 months. Madison Square Garden Sports , the owners of the New York Knicks, is up 93%. F1 is lagging TKO and MSG, however, down marginally in that time. However, analysts generally expect the stock to outperform going forward. FWONK YTD line Formula One Group YTD “Sentiment has firmed up recently, we think due to positive management commentary on the commercial opportunities across Formula 1, in particular for sponsorship and licensing. We expect momentum can continue, noting 2027 EBITDA will benefit from a full calendar and new races (e.g., Turkey), while growth and cash build should push leverage down to levels where capital return starts to come into view,” JPMorgan analyst David Karnovsky wrote last month. Karnovsky has a buy rating on the stock. In a July 29 note, Morgan Stanley maintained its overweight rating on the stock and raised its price target to $125 from $120 — implying a 21% upside from Friday’s close. Earlier last month, analyst Sean Diffley wrote how the sport has major upside as it continues to expand. “The sport is still under-penetrated and under-monetized in the most lucrative sports market in the world (the US, where most people can’t name 3 drivers) and the fastest growing (Asia, esp China where we think companies like BYD would love to be involved with the sport).” Diffley wrote. The key drivers of growth “One of the most underappreciated growth vectors is around the Licensing & Consumer Products opportunity, which has the potential to rival partnerships someday with the potential to double or even quadruple over coming years, which would likely also require incremental investment,” Diffley wrote. The partnerships and deals that Formula One has struck have allowed the sport to explode in popularity. When Liberty Media bought the league in 2017, the sport was struggling with viewership decline. In 2019, the racing league partnered with Netflix to produce “Drive to Survive “, a docuseries that gave a glimpse behind the scenes. By midway through the 2025 season, viewership was up 63% compared to 2018 . The sport has also continued to grow after the success of Apple TV’s F1 Movie. Bernstein analyst Ian Moore also has high expectations for the stock, setting it at an outperform rating. He calculated that sponsorships could bring over $1 billion for 2027 and 2028 in a July 28 note. “We continue to see sponsorship approaching ~$1.1B by FY2027 and ~$1.2B by FY2028, holding roughly 30% of primary revenue, against a ~$268M base when Liberty took control in 2017” Moore said. “We see the sponsorship compressed-lag thesis continuing to prove out: six league-level deals were signed before Apple’s first US race aired, and Marsh closed the insurance whitespace we flagged in May,” the analyst added. “On licensing, we size an $80-150M royalty base today, anchored to LEGO, Mattel, Disney, EA and the F1 Movie franchise, with a credible path toward $175-310M by 2028.”
