Investment bank Jefferies has updated its forecasts for streaming service Viaplay, and they do not make the best of reading. The bank has now stripped out those international markets no longer part of Viaplay’s strategy. The bank’s numbers also reflect current guidance from Viaplay.

“Our FY23-25E revenue forecasts decrease by -c.8.5% on average,” says Jefferies.

The bank states bluntly that Viaplay is now a “a sub-scale play on the secular growth theme of pay-TV consumption moving to streaming. It has a content / commercial / pricing strategy consistent with growth in both revenue and margins. But it lacks the resources of global peers at a point when SVoD demand is contracting and input / capital costs are rising. The market needs to put a lower probability on the likelihood of sustainable profitability given the above. We downgrade to Underperform.”

The bank’s ‘base case’ scenario is not helpful, and forecasts a 20 percent fall in share price, saying:

· Viaplay struggles to monetise users in a crowded market
· Viaplay sees sustained sports rights cost inflation
· Viaplay’s lack of scale and access to funding further constrains growth
· FY26 paying subscribers of 5.8 million, revenue growth FY22-26 of 2 per cent
· Peak EBIT margins of 5 per cent in Nordics and 4 per cent in International

The bank’s Upside scenario paints a much rosier picture (and a potential rise of 120 per cent)

· Viaplay struggles less with monetising users in a crowded market
· Viaplay does not see sports rights cost inflation
· Viaplay’s lack of scale and access to funding further constrains growth
· FY26 paying subscribers of 6 million but revenue growth FY22-26 of 3 per cent
· Peak group EBIT margins of 9 per cent

But as with any ‘Base’ or ‘Upside’ scenario there has to be ‘Downside’ picture. This could result in a fall of share price of some 61 per cent, says Jefferies.

· Viaplay struggles to monetise users in a crowded market
· Viaplay sees sustained sports rights cost inflation
· Viaplay’s lack of scale and access to funding further constrains growth
· FY26 paying subscribers of 4.9 million, revenue growth FY22-26 of 0 per cent
· Peak EBIT margins of 5 per cent in Nordics International fails to make profits

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Tags: Jefferies, streaming, viaplay