Man United shares upgraded at Deutsche Bank amid rival club deal reports

After a summer boost from a deal to re-sign superstar Cristiano Ronaldo, Manchester United shares have underperformed as the Glazer family offloaded shares and its players faltered on the pitch.

Manchester United Plc shares jumped after Deutsche Bank said bids for rival Chelsea Football Club highlight upside for the valuation of the storied north England-based team.

“We view Man U as more valuable than Chelsea,” analyst Connor Murphy wrote in a note to clients, adding that Manchester United has outperformed Chelsea on a revenue and operating profit basis over the past three years. The shares rose as much as 6.7% in early trading to $14.02 (€13.08), the biggest intraday gain since August.

Murphy noted that reported bids for Chelsea range from £2bn plus to £3.5bn (€2.35bn to €4.11bn), while Manchester United’s enterprise value is currently £2.1bn (€2.46).

“In a theoretical sale, we would argue that Man U should be sold for more than Chelsea,” said Murphy, adding that the bank has no view regarding whether the Florida-based Glazer family would sell the club any time soon. He upgraded his rating to buy from hold, while maintaining a price target of $18 (€16.80).

Deutsche Bank’s comments follow reports of several bidders chasing Chelsea after owner Roman Abramovich put the team up for sale following Russia’s invasion of Ukraine and subsequent sanctions on the billionaire. An offer from Centricus Asset Management Ltd. values Chelsea at more than £3bn (€3.5bn), including commitments for further investment, according to a person familiar with the matter.

After a summer boost from a deal to re-sign superstar Cristiano Ronaldo, Manchester United shares have underperformed as the Glazer family offloaded shares and its players faltered on the pitch. The team crashed out of the lucrative UEFA Champions League last week and currently sits outside of the top four Premier League spots that earn a place in next season’s tournament.

Still, the club’s brand appeal remains strong, despite the team’s stumbles, according to Deutsche Bank, which highlighted its 200 million social media followers and ability to monetize its fanbase through broadcasting rights, sponsorships and merchandising.

“Man U’s valuation sits at the lower end of our sports and live events comp group,” added Murphy, “which we think is not justified.”

Bloomberg