UPDATE: Nomura Reiterates on Manchester United Following Closer Look at Commercial Division

In a report published Wednesday, Nomura analyst Matthew Walker reiterated a Neutral rating on

, but lowered the price target from $18.80 to $18.00. In the report, Nomura noted, “We take a closer look at commercial, the largest division, accounting for 42% of sales rising to c50% and an important driver of revenue. Our conclusion is that the outlook for sponsorship remains strong and that a high inflation rate for renewal of the Nike contract is justifiable (despite removing the FY2016 catch-up payment). New media should kick in from FY2015 but the level of revenue is inherently uncertain at this stage. Firstly, our commercial revenue has been reduced from FY2016 by 3%. This includes the Nike contract revenue down GBP 13.6m (18%) on removal of a previously assumed catch-up payment. For FY2014E our broadcast revenue is lowered to GBP 138m (-2%) and in FY2015E to GBP 135m (-6%). With no change to our cost estimates this result in a reduction in company-defined EBITDA of 1% in FY2014, 4% in FY2015, 9% in FY2016 and 6% in FY2017. Reflecting these changes, our target price moves to USD 18.0 from USD 18.8. We forecast revenue +12.7% to GBP 86m. We look for commercial revenue +17%, and broadcasting EQUITY RESEARCH AMERICAS Americas Early Bird 11/13/2013 +33% owing to new FAPL deal, with some offsetting impact (GBP 2-3m) in matchday revenue from Olympic comparison last year, which causes an 11% drop.” Manchester United closed on Tuesday at $15.80.