Manchester United co-owner and British billionaire Sir Jim Ratcliffe, at OId Trafford.
Manchester United co-owner and British billionaire Sir Jim Ratcliffe, at OId Trafford.
The long-term competitive prospects for Manchester United are bright enough for one of the world's biggest investment banks to be bullish on the club's future.
Swiss-based UBS, a major financial institution that operates in more than 50 countries, have granted United's listed entity on the New York Stock Exchange, Manchester United PLC (NYSE:MANU) a 'buy' rating - a move that points towards confidence that the club will soon be back challenging for honours and seeing revenue streams increased as a result.
One of the key drivers for the confidence was the new management led by Sir Jim Ratcliffe and Ineos, with the stronger focus on managing costs via reducing the cost base, allied with the club having access to major revenue streams making the club an attractive proposition for investing.
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UBS gave the stock a $23 price target that suggests a 30 per cent upside from Monday's close. Shares were up 1.6 per cent at $17.96 in early trading in New York on Tuesday.
In a note to clients, UBS stated: "The new management and its focus on cost management should support investment to improve sporting performance as well as a return to net profitability.
"We see the real upside to the equity story linked to an eventual return to the more lucrative Champions League, a scenario which could potentially drive revenues to £800m."
The bullish outlook also focused on UEFA Champions League participation in the not-too-distant future - with some confidence returning after the sacking of Erik ten Hag earlier this season and the arrival of Ruben Amorim from Sporting CP.
"This is by no means a foregone conclusion given the recent poor performance, but the new manager provides a potential turning point," UBS's note added.
"The new manager provides a potential turning point for change, albeit one which may take time to materialise," UBS continued.
"With a superior revenue base than most peers and thus an ability to spend more on talent [players], we assume performance will turn around leading to a Champions League participation from the 2028 season."
UBS said United currently trades at 4.4 times enterprise value to sales, compared with an average of six times for US-listed sporting entities, something which backed up the weighty valuation of the football club, which Forbes pegged earlier this month at £5.15billion.
UBS went on: "With continued interest in sports teams and leagues from private equity and wealthy individuals seeking trophy assets, we see the valuation of Manchester United as well underpinned."