With commercial network broadcasting across Europe in the advertising doldrums (Spain and Italy in a state of near-collapse) it’s good to see a positive report on one broadcaster in the shape of Germany’s Pro7/Sat1 group.
Investment banker Morgan Stanley, in a note to clients, suggests that Pro7 had a “strong performance in H1” and that a recent mark down in the broadcaster’s share price is overdone.
“The valuation does not reflect the relative resilience of the company’s growth profile compared to peers, and concerns about looming downgrades are significantly overdone, in our view.,” says the bank’s report. “We believe our above-consensus 2012-13 forecasts are undemanding and expect Pro7 to surprise positively going into Q4. We strongly believe the small deterioration in German TV advertising will be more than offset by strong International and Digital growth. In our view, the market is not giving Pro7 credit for having one of the best cost-control track records in the industry and remaining primarily focused on profit growth. Trading at a discount to peers and offering a safe c.9 per cent dividend yield, we expect the stock to perform well in H2.”