ITV shares under pressure on Deutsche Bank downgrade
ITV was under the cosh in early trading after Deutsche Bank downgraded the stock to ‘sell’ from ‘hold’.
FTSE 100
8,172.15
16:59 02/05/24
FTSE 350
4,492.44
16:49 02/05/24
FTSE All-Share
4,446.15
17:04 02/05/24
ITV
71.80p
16:40 02/05/24
Media
11,755.14
16:49 02/05/24
It said the UK broadcasting market has been "kind" to ITV, noting that Channel 5 had its programming budget slashed and Channel 4 has focused on its public service remit and lost its most commercial series. However, this isn’t for much longer, said DB.
It noted that after its takeover by Viacom, Five is already showing improving audience share and the bank said it expects advertisers to follow. In addition, Channel 4 could now be privatized and ITV’s weakness online is starting to tell.
“We find the upside case of retransmission fees, Liberty takeout and cash returns/dividends unconvincing,” said the bank.
Deutsche said that Viacom’s takeover of Five in 2014 was largely overlooked for ITV, but the implications are material as Viacom is reversing 30% programming cuts under previous management, audience share is recovering and the switch to Sky ad sales will see increased traction with advertisers.
The bank also noted that five years into the 2010 turnaround plan to reinvigorate ITV Studios, growth is still mainly coming from acquisitions, with true organic growth less than 4%.
DB upped its price target on the stock to 220p from 205p.
At 08:37, shares were down 1.5% at 272.10p.