Manchester United Plc (NYSE:MANU) shares could be a big winner, reckon analysts at Jefferies, thanks to new management off the pitch.
The US investment bank issued a 'buy' rating based on a share price target of $26.00 versus the stock currently priced at $15.94, suggesting potential upside of 63%.
Jefferies notes that recent leadership changes at Manchester United signal a shift towards "experienced European football on and off the pitch, and a real opportunity to improve team performance and club growth".
Under new co-owner Jim Radcliffe, the board has "clearly noted that they are here to win competitions" and have increased their chances of improving the team quality and achieving on-field success with the addition of Dan Ashworth as sporting director, the analysts said.
Further away from the pitch, the newly appointed chief finance officer, Roger Bell, who previously held a similar role at INEOS, has increased confidence in the long-term opportunities for the club.
The analysts met Bell recently and said they "came away incrementally more confident" in the long-term opportunity for the football club's finances.
Cost management is a priority under the new ownership, with the club announcing a redundancy program expected to reduce headcount by approximately 250, as well as streamlining IT operations.
Revenue opportunities appear "material" within sponsorship, merchandise, matchday revenue and from broadcast if success improves on the pitch.
Another source could be from player development and sales.
The board are looking at talent development as a "future boost to profitability", the analysts pointed out, with Man Utd "known to possess one of the most productive club academies in England", including naming Kobbie Mainoo and Alejandro Garnacho.
"In tandem with Erik ten Hag's strong track record of raising young talent, mgmt expressed player trading could become a major source of income, citing Man City's estimated profit of circa $100 million versus MANU's circa $20 million, attesting to a relatively untapped income stream."
In its results yesterday the club reported record sales of the Adidas Stone Roses range and is preparing to launch a new e-commerce platform in September, while the new 2024/25 home kit featuring Snapdragon as a sponsor has also launched.