By Paul R. La Monica

Investors in Formula One may already feel like they are popping champagne corks at the top of the winner's podium even as racing action heats up both on the track and on the big screen.

F1 The Movie, from Apple Original Films and starring Brad Pitt, hits theaters on Friday. And the actual F1 calendar resumes this weekend, with the Austrian Grand Prix taking place on Sunday.

Shareholders in Formula One, which is part of John Malone's Liberty Media empire, are a lap ahead. Both its tracking stocks -- the Class A FWONA shares, which have voting rights, and the more actively traded Class C FWONK shares, which don't -- are up more than 12% this year. They have enjoyed solid gains since Barron's wrote positively about them in February.

Can F1's shares continue to rev higher? Wall Street is fairly bullish. The sport's popularity has been steadily rising in recent years thanks to the Netflix reality show Drive to Survive, which is now in its seventh season. Exposure from the movie, which counts popular Ferrari F1 driver and seven-time world champion Lewis Hamilton as a producer, should help as well.

That matters because F1 is in the midst of negotiating new TV rights for the U.S. The current deal runs out at the end of this year.

Disney-owned ESPN now airs the broadcasts from the U.K.'s Sky Sports, a subsidiary of Comcast. But according to numerous reports, Disney/ESPN isn't expected to bid to retain the rights. F1 is said to be seeking an increase in annual fees to about $150 million from the current level of $90 million.

Another bidder is likely to be willing to pay up, considering F1 races' solid ratings. Live sports continue to be an attractive place for advertisers in an increasingly fragmented media world.

Pivotal Research analyst Jeffrey Wlodarczak said in a May report that either Netflix, which has been boosting its presence in live sports streaming, or Comcast's NBC is likely to be the winner for a new broadcast deal. Wlodarczak has a price target of $125 target on the Class C Formula One shares, the highest on Wall Street and more than 20% above current levels.

Benchmark's Matthew Harrigan also thinks Netflix and NBC could be bidders for a new F1 deal, but he says that Apple TV+ also could have interest, given the synergies with the movie, which should eventually stream on Apple TV+ following its run in theaters. He also doesn't rule out Amazon.com, which has been airing live sports as part of its Prime Video offering, including races from the popular American stock-car circuit Nascar.

Harrigan, who recommends F1 as a Buy, has a $102 price target on the Class A shares, nearly 10% higher than the current price.

There are other reasons to like the stock as well. Liberty Media, which has often been criticized for having a labyrinth of tracking stocks for various businesses, should become a simpler story later this year.

That is because Liberty plans to split off its Liberty Live unit, which owns a big stake in concert promoter and Ticketmaster parent company Live Nation, into a separate entity later this year. Susquehanna analyst Eric Mondelblatt, who has a $121 price target on the Class C shares, said in a report that the split is positive for the stock because it makes Formula One a cleaner, pure-play story.

F1's plan to purchase MotoGP, a motorcycle racing circuit, should also give the stock a boost. Mondelblatt thinks that the deal, which is expected to close in early July, will boost earnings for the next few years. The "health of the league is further along than where F1 was when it was acquired in 2017," the analyst says.

Formula One is clearly in healthy shape now. Analysts are forecasting annual earnings-per-share increases of more than 20% for 2026 and 2027. Deutsche Bank analyst Bryan Kraft, who has a Buy on the stock, said in a report this month that F1 is "well-positioned as a top-tier global sports league and is economically defensive" because of its revenue from long-term contracts and minimal exposure to potential tariffs.

With F1's popularity riding high, it seems that investors won't have to worry about the stock slowing down to take a pit stop.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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June 26, 2025 12:38 ET (16:38 GMT)

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