Bank of America has upgraded its rating on Formula One Holdings (NASDAQ:FWONK) to Buy from Neutral, citing the motorsport’s durable business model and long-term growth potential.
Analysts highlighted Formula One’s resilience amid a volatile macroeconomic and geopolitical environment.
“Amid broader concerns related to AI disintermediation across media and entertainment, we view live sports and FWONK specifically as being more insulated from these risks,” analysts wrote.
Bank of America said shares currently trade at 21 times expected free cash flow for calendar year 2027, creating a favorable risk-reward profile despite recent share underperformance. The firm also noted historical reports of potential buyer interest, suggesting a valuation floor for the stock.
The report acknowledged short-term disruptions to the F1 calendar following recent Middle East hostilities, which led to the cancellation of races in Saudi Arabia and Bahrain. Bank of America cut 2026 revenue estimates by $191 million and adjusted OIBDA by $80 million but maintained its 2027 forecast, viewing the disruptions as one-off events that do not affect the long-term value of the business.
Analysts also pointed to growth opportunities following Formula One’s acquisition of MotoGP, noting that F1 has roughly twice the global fan base yet significantly higher monetization across media rights, race promotion, and sponsorship. While MotoGP may not fully close this gap, the disparity underscores additional revenue potential.
Looking ahead, Bank of America sees a path to capital returns beginning in 2027, likely through share buybacks. The firm estimates that Formula One could repurchase up to $2 billion in shares if excess free cash flow is deployed.
“FWONK continues to exhibit compelling long-term growth characteristics, and we believe the company remains well-positioned to capitalize on both its existing fan base and commercial expansion opportunities,” analysts wrote.
The brokerage maintained its price target of $105.