ITV downgraded by Macquarie on consumer sector weakness

Conor Coyle WebFG News | 13 Sep, 2017 17:54 - Updated: 17:54 | | |

itv jeremy kyle

ITV

149.00

11:00 22/11/17
1.43%
2.10
  • 7,429.26
  • 0.24%17.92
  • Max: 7,434.30
  • Min: 7,410.38
  • Volume: 0
  • MM 200 : n/a
11:00 22/11/17
  • 1,527.27
  • 0.12%1.82
  • Max: 1,528.93
  • Min: 1,525.10
  • Volume: 0
  • MM 200 : n/a
11:00 22/11/17
  • 7,270.55
  • 0.04%3.07
  • Max: 7,275.09
  • Min: 7,243.06
  • Volume: 0
  • MM 200 : n/a
11:00 22/11/17
  • 4,132.03
  • 0.24%10.06
  • Max: 4,134.46
  • Min: 4,121.95
  • Volume: 0
  • MM 200 : n/a
11:00 22/11/17
  • 4,080.39
  • 0.24%9.94
  • Max: 4,082.66
  • Min: 4,070.45
  • Volume: 0
  • MM 200 : n/a
11:00 22/11/17

Television firm ITV was downgraded to ‘underperform’ from ‘neutral’ by analysts at Macquarie on Wednesday on the back of weakness in ad spending in the consumer sector.

ITV’s target price was almost halved to 110p from 200p by Macquarie.

The analysts said that a major drop in advertising spend during the first half of the year combined with uncertainty surrounding Brexit forced the downgrade.

"Investments in ITV Studios may finally start bearing fruits in 2018, increasing ITV’s appeal as a take-over target. But the sharp drop in consumer sector’s ad spend in H1 suggests structural factors are adding to Brexit uncertainty," a note said.

The consumer sector’s ad spend declined by 11% in the first half of 2017, higher than any European competitors.

The downgrade of ITV comes as part of a larger bearish outlook for broadcasters from Macquarie.

Analysts commented that consumer habits were moving away from mass advertising towards more direct engagement with viewers.

"Increasing demand for local and craft products diminishes the importance of TV’s most unique advantage, mass advertising," Macquarie said.

"Online purchases (ecommerce already accounts for 3% of GDP) also force advertisers to shift marketing closer to the point of sale."

Shares in ITV were trading 2% lower on Wednesday at 158.15p as of 15:15 BST.

More news

10:42 Dealogic sale to boost Euromoney cash position

International business information and events group Euromoney Institutional Investor has reached a binding agreement to sell its minority equity stake in Dealogic, a provider of content and software solutions to financial firms, to Ion Investment Group for approximately $135m, it announced on Wednesday.

10:44 Euromoney boasts strength in 'year of transition'

Business information and events group Euromoney Institutional Investor saw its revenue and profit rise comfortably in the 2017 financial year, it reported in its preliminary statement on Wednesday, with adjusted total revenue ahead 6% at £428.4m.

10:28 Pantheon International completes four new investments in October

Investment firm Pantheon International completed four new investments throughout the month of October, spreading £31.4m pounds between three existing North American interests and a new commitment towards a US mid-market buyout fund.

10:23 SSP full-year profit up, announces £100m special dividend

SSP reported a rise in full-year profit on Wednesday as it announced a special dividend of around £100m, but said that like-for-like revenue growth next year is expected to drop slightly.

09:58 Europe open: Stocks edge higher with spotlight on Fed minutes, German Socialists

Stocks have begun the morning little changed despite the strong gains overnight on Wall Street, with traders waiting for the release of the minutes of the US Federal Reserve's last rate-setting meeting in the evening and monitoring the news-flow out of Germany.

09:57 Charles Stanley warns over regulatory changes

Wealth manager Charles Stanley posted a jump in interim profit on Wednesday but cautioned that it may struggle to meet current market expectations if it does not see a higher level of trading activity or other revenue increases in the second half.

10:24 Lebanon's Hariri takes back resignation as prime minister - report

Saad al-Hariri has revoked his resignation as Lebanon's prime minister, according to a local news report on Wednesday.

09:43 Finsbury Food says trading in line, revenue up 4% in first four months

Cake and bread manufacturer Finsbury said on Wednesday that trading in the first four months of the year has been in line with expectations.

09:36 ScS hails strong start to the year

Sofa and flooring retailer ScS said on Wednesday that it has made a good start to the year.

09:26 PowerHouse reaches first milestone in waste-to-energy design

Waste-to-hydrogen production firm PowerHouse Energy has completed the pre-front-end engineering and design (pre-FEED) stage of its distributed modular gasification (DMG) system, marking the first major milestone in the design of the product.