On Wednesday, Deutsche Bank adjusted its outlook on Manchester United (NYSE:MANU), reducing the shares price target to $16.90 from the previous $18.50 while keeping a Hold rating on the shares. The adjustment comes as the bank incorporates the latest financial results and projections for the upcoming year into its analysis.
Manchester United, under the partial ownership of Sir Jim Ratcliffe, who holds a 25% stake, has been undergoing significant changes. The past year has seen the club focus on strengthening its foundation, securing a new shirt sponsor, initiating the development of a new training facility, and launching a cost restructuring plan. This plan is expected to cut annual costs by approximately £40 million to £45 million, with a projected cost savings run rate of around £37 million anticipated in the fiscal year 2025.
The club has also entered into discussions regarding the future of Old Trafford stadium. Various options are being considered, including the possibility of constructing a new stadium with a capacity of 100,000 seats, which would be part of a broader regeneration initiative for the Trafford area. The proposed development, which could cost up to £2 billion, aims to leverage improved transportation and infrastructure. The move would potentially increase the stadium's capacity by a third and provide cutting-edge facilities, leading to higher ticket prices and a significant rise in match-day revenues.
Deutsche Bank's revised price target reflects the club's current financial performance and strategic initiatives aimed at enhancing its long-term revenue and profitability. The bank's analysis indicates a cautious but watchful stance on the stock, suggesting that investors maintain their positions while the club executes its restructuring and explores development opportunities.
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