Equity valuation: Manchester United Plc

• Autor(a) principal: Henriques, João Pedro Madeira
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/28625
• topic: Manchester United Plc; Avaliação de empresas -- Business valuation; DCF Discounted Cash Flow --; Avaliação por múltiplos Valuation using multiples; Share price; Preço da ação; Clube desportivo -- Sports club; Futebol

This project’s principal goal is to perform an Equity Valuation of Manchester United Plc, in order to determine an implied share price resorting to forecasting future cash flows. Hence, to be able to perform this valuation, a company and industry analysis was conducted, as well a projection of its evolution. Manchester United Plc is the company which runs Manchester United Football Club, one of England’s biggest clubs and also one of the most well-known clubs in the World, with a great amount of supporters and followers in every continent. Like every football club, its business is conducted through three main segments: Commercial, Broadcasting and Matchday. To assess the company’s enterprise value, there were utilized two different methodologies, DCF and Multiples Valuation. However, due to Manchester United trading at a clear premium and the small number of publicly traded football clubs, Multiples Valuation was deemed not significant. With the Discounted Cash Flow method, the implied share price was $11,86, which was compared with the stock price at two different moments. Comparing with the market in 21/11/2022, before the Board’s announcement that they are looking to sell the club, it represented a depreciation of 9%, to which we recommend holding the stock. Inversely, comparing with the share price in 25/11/2022, we recommend selling it, due to a downside of 44%. In conclusion, considering the latest development, a recommendation to buy is made.