Advanced Television

Deutsche Bank: “SELL” European commercial broadcasters

November 15, 2018

By Chris Forrester

Client advice to investors from analysts at Deutsche Bank is to get out of any holdings in 5 major European commercial broadcasters. The 5 are: Germany’s RTL, France’s TF1, Mediaset Spain, Spain’s AtresMedia (Antenna 3) and France’s M6.

The bank argues that the (approx) 30 per cent fall in the ‘broadcasting’ sector’s share price this year “might suggest the bad news is in the price for European TV. We believe investors should look further.”

The bank’s major worry is that advertising income for the sector will continue to be under pressure.

Not included in the overall advice is Germany’s ProSieben/Sat1 (P7, and which the bank downgrades from ‘Buy’ to “Hold”), saying. “P7 was also the first to acknowledge that linear TV is set for long-term decline. Consensus and guidance from the others has yet to catch up.”

The bank continues, saying: “The major pushback on our 5 SELL ratings in European TV is the idiosyncratic risk around country-specific exposure and liquidity. Country-specific risk here comes from European TV broadcasters being almost entirely single market, highly geared, cyclicals. So Selling individual names can end up as inadvertent macro calls on specific European markets (eg TF1/France, Mediaset Espana/Spain), with the only real exception being RTL.”

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