Financial Trading Blog
Stock of the day 11/05/2016 – Manchester United PLC
For most of 2016 the markets haven’t been kind of Manchester United. Starting the year at $17.63 (around $2 away from its 2015 peak) the stock quickly began to fall, plunging all the way to a 3 and a bit year low of $13.61 by February 10th, all thanks to a mixture of broad market turmoil and a spotty performance from the team itself.
The stock did manage to climb back to the $15 dollar mark towards the end of February, largely thanks to the announcement of a 26.6% rise in second quarter revenue to £133.8 million (leaving the club on track to become the first British team to make over half a billion in revenue across 12 months). Yet that rebound wasn’t to last for long, and by March 22nd the company had hit a fresh 2016 (and near 40 month) low of $13.33, the stock’s decline exacerbated by Manchester United’s Europa League exit at the hands of Liverpool.
(Source: IT-Finance.com 11/05/2016)
Since then, however, things have gradually begun to improve, arguably for both the stock and the club. By April 21st the stock had climbed back above $14.50, before surging by nearly 20% in 4 days as Manchester United reached a record-tying 19th FA Cup final with a last minute victory over Everton at Wembley. That rise saw the stock reach $17.81 for the first time since 2015 ended, though it hasn’t quite been able to build on that year in the interim, Manchester United PLC sitting at a current trading price of $17.05 (IT-Finance.com, 11/05/2016).
Regardless of its Q3 figures on Friday (with analysts expecting EPS of $0.14 from a $0.07 loss at this point last year) Manchester United could be in for a bit of a slump as the season comes to a close. Following Manchester City’s draw with Arsenal at the weekend all United needed was 2 wins to nab that fourth Champions League spot. Yet a dramatic (and controversial, given the damage dealt to the team’s coach before the match) loss to West Ham in the final ever game at Upton Park means their European fate is somewhat out of their hands.
If City win at Swansea United can’t reach the continent’s top club competition, even if they beat Bournemouth at Old Trafford. Missing out on the Champions League, and the money it brings, may well overshadow the club’s likely victory in the FA Cup final against Crystal Palace, a win that would see then match Arsenal’s 12 trophies.
Manchester United PLC has a consensus rating of ‘Buy’ with an average target price of $20.78.
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