UBS is playing the long game on Manchester United Plc (NYSE:MANU), despite the club being on track for its worst-ever Premier League finish.
The bank has cut its earnings estimates for 2025 and 2026, reflecting a predicted 15th-place finish this season and a mid-table recovery to 10th next year.
However, analysts still see long-term upside, banking on the club’s strong commercial revenue and a potential return to the Champions League.
The downgrade in forecasts is minor compared with the dip in form on the pitch. UBS has trimmed its 2025 revenue projection by 3% to £654m and cut its 2026 forecast by the same percentage to £636m.
This follows lower expectations for domestic broadcasting revenue and the assumption that United will not qualify for European competitions in 202.
Despite the bleak short-term outlook, UBS believes there is room for optimism. Every place higher than 15th in the Premier League could add £2.8m in revenue.
Progressing beyond the round of 16 in the Europa League could generate an extra £16m in broadcast revenue and up to £15m in matchday earnings.
Winning the tournament would also secure a Champions League spot, boosting future revenue significantly. UBS does not assume these outcomes in its forecasts but acknowledges they could provide an upside, the bank said.
The real prize, according to UBS, is a return to the Champions League in the long run. The bank estimates this could drive annual revenues to £800m.
A full stadium redevelopment could add another £200m from increased ticketing, hospitality, and events. However, with no clear timeline or financing plan in place, UBS has not factored this into its valuation.
UBS has lowered its price target for Manchester United shares to $21.75 from $23 but maintains a 'buy' rating.
The stock closed at $14.74 before the latest report, meaning UBS still sees significant upside. The market will have its say when United's next financial results land, but for now, the Swiss bank is keeping faith in the club’s financial resilience, even as its performances on the pitch remain far from title-winning form.