11:46 AM EDT, 10/17/2024 (MT Newswires) -- Formula One Group (FWONK) is set for "solid" growth with a 2026 renewal of US linear rights representing a tailwind and the Concorde agreement's renewal for the 2026 season seen as a key driver for financials, UBS Securities said in a note Thursday.

UBS said that US rights account for about 3% of the company's primary revenue as viewership increased in the low-single digits during the current deal, compared with a 70% increase in the prior deal.

The investment firm also highlighted F1's "attractive" cash generation profile due to its lower working capital use, which has been used for organic investments and mergers and acquisitions recently. According to UBS, F1's acquisition of MotoGP is estimated to be accretive in the low-single-digits to free cash flow and will expand footprint to underpenetrated markets.

"While growth should remain solid, we expect a decelerating trend going forward," UBS added, citing lower operating leverage on team payments and less upside to race promotion in the near term.

UBS initiated coverage on Formula One with a neutral rating and a price target of $85.

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