On Wednesday, Manchester United Plc (NYSE:MANU) shares edged slightly lower despite reporting better than expected fiscal first-quarter 2022 results. The company announced its most recent quarterly results before markets opened, beating the consensus for analyst expectations on revenue and earnings.
MANU posted fiscal first-quarter non-GAAP earnings per share of £0.0767, beating the consensus for analyst expectations by £0.10. On the other hand, revenue for the quarter increased by 16.1% from the same quarter a year ago to £126.5 million, surpassing Street expectations by £4.35 million.
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Manchester United shares have plunged more than 23% since the 27th of September, swinging to a net year-to-date loss of 4.31%.
Should you bet on MANU’s recovery?
From an investment perspective, MANU shares trade at a compelling forward P/E ratio of 7.41, making the stock an attractive option for value investors.
In addition, analysts expect its earnings per share to grow by a whopping 219% next year, thus gaining the attention of growth investors.
The company seems to have opted to stick with the current manager, ole Gunnar Solskjaer despite calls for his sacking from fans and mainstream media, saving it a significant amount in potential severance for the current coaching staff.
With fans returning to the match days, Manchester United’s forecasted earnings could be easily achieved.
Technically, MANU shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted to trade closer to the oversold conditions of the 14-day RSI.
However, with the stock price far from retesting the trendline support, the current decline seems poised to continue for the foreseeable future.
Therefore, investors could target extended declines at about $15.20, or lower to $14.64, while $16.49 and $17.12 are crucial resistance levels.
MANU stock si closer to bottoming
In summary, although Manchester United shares have declined significantly since late September, the stock seems poised for continued downward movement after the solid earnings failed to trigger a rebound.
Therefore, it may be best to wait for the stock to retest the current support levels before buying.
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