Formula One Upgraded to Buy on 21x 2027 FCF Valuation and $2B Buyback Plan
Formula One was upgraded from neutral to buy, citing durable business model, 21x 2027 free cash flow valuation, and potential acquisition interest suggesting a valuation floor. The firm cut 2026 revenue estimates by $191 million and OIBDA by $80 million following race cancellations, while projecting $2 billion in share buybacks from excess cash.
1. Upgrade to Buy Rating
Formula One Holdings was upgraded to Buy from Neutral, with analysts citing its durable business model, 21x expected 2027 free cash flow multiple and history of potential acquisition interest providing a valuation floor. The price target remains $105.
2. 2026 Forecast Cuts
Cancellations of the Saudi Arabia and Bahrain races prompted a $191 million reduction in 2026 revenue estimates and an $80 million OIBDA adjustment, though 2027 forecasts were unchanged, reflecting views that these disruptions are one-off events.
3. Growth Path and Capital Returns
Analysts highlighted the MotoGP acquisition's upside, noting Formula One monetizes media rights roughly five times, race promotion six times and sponsorship ten times greater than MotoGP. Excess free cash flow is projected to fund up to $2 billion in share repurchases starting in 2027.