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Formula One Group stock forecast: Will FWONK shares capitalise on record 24-race F1 2023 calendar?

By Rob Griffin

Edited by Jekaterina Drozdovica

17:56, 17 November 2022

Formula 1 sport cars in a race.
Will Formula One’s ongoing expansion help boost the stock? – Photo: Shutterstock; Michael Cola

Investors in Formula One Group (FWONK) are hoping the excitement surrounding next year’s record 24-race calendar will provide a boost to the share price.

The FIA Formula One World Championship, regarded as the pinnacle of international motorsport, has more than half a billion passionate fans around the world. And it’s hoped that the sport’s ongoing expansion will lead to increasing revenue for the company and benefit the FWONK stock price.

In our Formula One Group stock forecast, we look at its recent results, analyse the performance of shares, and reveal what analysts expect to happen.

What is Formula One Group?

Formula One Group controls the exclusive commercial and promotional rights to the FIA Formula One World Championship series and the monetisation of those rights. The firm is responsible for the development and promotion of the series, along with the FIA (the regulatory body), participating teams and commercial partners.

It’s a subsidiary of Liberty Media, which purchased F1 for $8bn in January 2017, and trades on the  Nasdaq Stock Exchange under the ticker: FWONK. This stock tracks and reflects the economic performance of the businesses, assets and liabilities attributed to the Formula Group.

F1 racing has been a fixture on the motorsport calendar for more than 70 years. It has long attracted the cream of engineering and driving talent. Every race on its international calendar sees thousands of spectators packing the venues, along with many millions of avid armchair fans watching the action on television. 

The sport’s drivers have also become household names through the years, with the likes of Michael Schumacher and the late Ayrton Senna among those to win the annual World Championship series.

In 2021, the title came down to the last few laps of the final race where in controversial circumstances  Max Verstappen overtook Sir Lewis Hamilton to clinch the crown.

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How has the FWONK stock price performed?

Any Formula One Group stock forecast must consider how the shares have performed in recent years and whether it’s been a good investment. The FWONK stock price has risen from $31,65 in January 2017 to $57.05 at market close on 16 November.

FWONK live share price

The all-time high stock closing price was $70.08 recorded on 1 April 2022, while the average price for the last 52 weeks was $62.16.

Over the past three years, FWONK stock has achieved trailing returns of 9.39%, ahead of the -6.89 recorded by the entertainment industry, according to Morningstar data of 17 November.

FWONK stock price

Growing revenues yet falling profits in Q3

Results for the third quarter of 2022 showed the Formula One Group’s revenue came in at $715m  – $47m higher than the $668 figure for the corresponding quarter in 2021. Total operating income for the group, meanwhile, was $64m – down by $4m from the third quarter of last year. 

Primary F1 revenue increased in the third quarter with growth across media rights and sponsorship, partially offset by a decline in race promotion revenue. The report said:

“Race promotion revenue decreased due to lower fees generated from the different mix of events held, with one additional race held outside of Europe in the prior year period.”

Media rights increased due to growth in F1 TV subscription revenue and increased fees under new and renewed contractual agreements. Sponsorship revenue also went up due to the recognition of revenue from new sponsors.

According to Stefano Domenicali, Formula 1 president and chief executive, the sport is delivering across all areas including financial results, engagement with fans and action on the track. He said:

“We look forward to a strong finish to the season with drivers and teams battling on the track.”

In a letter to shareholders back in April 2022, the company highlighted the success of Drive to Survive, the Netflix behind-the-scenes show, in bringing new fans to the sport, noting:

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“According to market surveys, 73% of US viewers are more interested in F1 as a result of watching the show…The fourth season reached #1 on Netflix in 33 countries during its debut weekend.”

More fixtures next year

In late September 2022, a 24 race calendar was announced for 2023, with China and Qatar set to return and the arrival of Las Vegas to host the penultimate round on a Saturday night. 

The season starts in Bahrain on 5 March and concludes in Abu Dhabi on 26 November. As usual, it will have a summer break during August.

In a statement, FIA president Mohammed Ben Sulayem said the addition of new venues helped underline the FIA’s “sound stewardship” of the sport.

“I am delighted that we will be able to take Formula 1’s new era of exciting racing, created by the FIA’s 2022 Regulations, to a broader fan base in 2023,” he added.

Formula One Group stock forecast: Where will the price go next?

So, what could happen to FWONK stock? It was rated as a ‘moderate buy’, based on the FWONK stock forecast views of four analysts compiled by MarketBeat, as of 17 November. Three had ‘buy’ recommendations in place and one a ‘sell’. 

Their consensus was that the FWONK stock price could hit $70.60 in the next 12 months. The highest Formula One Group stock forecast for 2023 suggested it could reach  $77, the lowest prediction warned of a slight fall to $56.

According to TipRanks data as of 17 November, three analysts offering 12 month price targets believed the stock was a ‘strong buy’, with their consensus view being that the price could hit $70.33 over the coming year. The highest FWONK stock forecast came in at $73 and the lowest at $68. 

Meanwhile, the Formula One Group stock forecast for 2025 of Wallet Investor, an algorithmic forecaster, had the price reaching $98.99 by November 2025.

Neil Macker, senior equity analyst at Morningstar, had a $49 fair value estimate on the stock, according to his Formula One Group share price forecast.

He pointed out the return of crowds drove advertising and hospitality revenue in the third quarter, but fewer flyaway races – trips requiring air travel - hurt race promotion revenue. He said:

“The higher promotion fees are one of the major reasons for not only the 24 race schedule but also the increased number of GPs outside of Europe,” he said, adding:
“The 2023 season will feature four races in the Middle East, five in North America with three in the US,  four in Asia-Pacific, two in Eastern Europe, and one in South America with the remaining eight in Western Europe.”

However, Macker raised some concerns about the enlarged fixture list.

“The 24 GP schedule and the expansion outside of Europe will lead to some very strange travel that could result in public backlash from teams. One example is April and May where the races will shift from Melbourne to Shanghai to Baku to Miami to Imola, Italy.”

He also suggested the “increasingly far-flung schedule” increases the chance of climate change activism and protests against F1 and its teams, noting:

“While the actual races generate relatively little pollution, the need to ship roughly 30 metric tons of race cars, tools, parts, computers, and other support equipment for each of the 10 teams per race burns quite a bit of fuel, especially with races outside of Europe depending on air and ocean freight.”

While Macker doesn’t view this as a major risk to the business model, he pointed out that it could cause issues for ESG investors.

“Even the potential switch to the 100% sustainably fuelled hybrid engine in 2025 would not ameliorate the freight-related environmental concerns,” he added.

Final thoughts

Remember, Formula One Group stock predictions by analysts can be wrong. They shouldn’t be used as a substitute for your own research. Always conduct your own due diligence, studying the latest news, a wide range of commentary, technical and fundamental analysis.

Remember, past performance is not a reliable indicator of future returns. And never trade money you cannot afford to lose.

FAQs

Is Formula One Group a good stock to buy?

Whether FWONK stock is a good buy will depend on your analysis of the company and its future prospects. It’s important to reach your own conclusions and not rely solely on the views of stock market analysts whose predictions may not be correct.

Will Formula One Group stock go up or down?

No-one knows for sure.  The stock was rated as a ‘moderate buy’, based on the FWONK stock forecast views of four analysts, compiled by MarketBeat as of 17 November. Three had ‘buy’ recommendations in place, and one a ‘sell’. Their consensus was that the FWONK stock price could hit $70.60 in the next twelve months. While the highest Formula One Group stock forecast for 2023  suggested it could go as high as $77, the lowest prediction warned of a slight fall to $56. Note that analysts’ opinions can be wrong.

Should I invest in Formula One Group stock?

This will depend on your personal circumstances, investment objectives, and your views on the company’s prospects. Always conduct your own due diligence before investing.

Markets in this article

FWONK
Liberty Media Formula C
78.25 USD
-1.27 -1.600%

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