Shares of Liberty Media Formula One could outperform going forward as the sport's popularity in the U.S. grows, according to Morgan Stanley. Analyst Benjamin Swinburne upgraded shares to overweight from equal-weight, saying in a Wednesday note that the stock can rally from here thanks to growing interest in Formula One racing events. "F1's rising popularity is translating into faster revenue growth, and the contractual nature of that growth leads to attractive compounding growth for its investors," the note read. Morgan Stanley raised the price target to $72 from $65. The new price target implies nearly 24% upside from Tuesday's closing price. Analysts believe the stock could get a boost this year from a renewal of U.S. media rights, as well as from the Las Vegas Grand Prix next year. They also said Liberty Media Formula One's contractually driven business model will generate a premium for the company. "In a media landscape facing rising headwinds, sports rights represent a rare opportunity," Swinburne wrote. "Global tech platforms are increasingly competing with incumbent broadcasters for exclusive rights, suggesting the value of sports may be inflecting higher." Formula One's popularity in the U.S. has exploded in recent years, thanks in large part to Netflix's "Formula 1: Drive to Survive" docuseries. The show follows all 10 teams in the sport and features interviews with drivers and key figures in Formula One. Swinburne also noted that the sport emerged with a larger and "more lucrative" race calendar from the Covid-19 pandemic, with a total of 23 races per year starting next year. Shares of Liberty Media Formula One gained more than 1% in Wednesday premarket trading. —CNBC's Michael Bloom contributed to this report.