Financial Trading Blog
Stock of the day 10/02/2016 – Manchester United PLC
Back in mid-November things weren’t looking too bad for United’s stock price. A record set of first quarter results, with a 39% jump in revenue to £123.6 million (with £71.2 million form commercial revenue, £27.6 million from broadcast revenue and £24.8 million from matchday revenue) aided by their £750 million kit deal with Adidas and a return to the Champions League after the dark (if brief) days of the Moyes era, helping United hit an intraday high of $19.76, around 20 cents lower than the all-time peak struck in mid-2014.
Yet the stock began to take a tumble as 2015 came to a close. That fall accelerated at the start of December, with United’s defeat to Wolfsburg in the Champions League causing the Manchester club to finish in 3rd place in their group, demoting them to the Europa League and, therefore, likely taking a big hit in terms of revenue.
(Source: IT-Finance.com 10/02/2016)
Following that European loss United entered a rough period in the Premier League; between the start of the season and the start of December van Gaal’s side had only lost twice. That came to an abrupt end, however, as they lost 3 games in a row to Bournemouth, Norwich and Stoke between the 12th and 26th December, causing the club’s stock to enter 2016 at a 3 month low of $17.63.
Since then there has been a slight improvement in Manchester United’s fortunes, winning 3, drawing 2 and losing 1 of their 5 Premier League games in 2016; they’ve also been successful in the FA Cup, beating Sheffield United and Derby to set up an eminently winnable 5th round fixture at Shrewsbury Town.
Yet the market turmoil that has plagued the New Year since the very beginning, alongside the fact that, in 5th place, 6 points adrift of 4th place Manchester City and a whopping 12 away from unlikely league leaders Leicester, United may be facing another season without Champions (or even Europa, given that West Ham are only 2 points behind the Red Devils) League football has seen the club’s stock suffer. From that $17.63 start price the company has plunged to a just-over 3 year low, and current trading price, of $13.78 (IT-Finance.com, 10/02/2016).
Manchester United PLC has a consensus rating of ‘Buy’ alongside an average target price of $22.33.
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