Bank upgrades ITV

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Analysts at investment bank Exane/BNPP have upgraded the UK’s commercial television broadcaster ITV to ‘Outperform’ (from ‘Neutral’), saying its positive review was helped by increased optimism on the UK’s advertising cycle.

In summary, the bank says that it has reassessed ITV’s business catalysts and the broadcaster’s recent track record, new clients coming aboard and the UK’s latest inflation analysis.

“Our upgrade is driven by a more bullish view on near-term advertising,” says the bank’s report. The bank’s new Target Price for ITV’s shares are now (GBp) 146, which translates into a 28 per cent upgrade.

The bank also alerts investors that there could always be a further ”cherry on the top” in the form of some sort of potential M&A activity for ITV.

There’s also an admission that the free-to-air broadcasting community has suffered badly over the past 5 years, and especially during the pandemic. The largest impact has been from digital and Internet-based activity. Indeed, Internet-based businesses now represent the largest share of the bank’s ‘media’ coverage by market capitalisation.

The bank points out that (excluding Tencent/Prosus valuation) its media sector (by market cap) now splits as:

Internet 40%
Professional Info 24%
Music 11%
Agencies 10%
FTA broadcasting 5%
Video games 4%
Outdoor 2%
Satellite 1%
Other 3%


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