Financial Trading Blog
Stock of the day 10/05/2016 – ITV PLC
After recovering from its autumnal slump by the end of last year 2016 immediately got off to a poor start for ITV, the stock dipping below £2.50 towards the end of January. By the start of February ITV had managed to lift itself back to £2.70, though the intense volatility of the second month of the year quickly put an end to the company’s nascent recovery as ITV plunged nearly 10% in 2 days to hit £2.37.
(Source: IT-Finance.com 10/05/2016)
A rebound above £2.50 by the end of February was just as brief, ITV’s full year report at the start of March putting it on track to trickle below £2.30 in the middle of the month. In many ways its post-update plunge was a tad harsh on ITV; the company did mange an impressive 18% rise in pre-tax profits to £843 million off the back of a 15% surge in revenue to £2.97 billion, leading to a special 10p dividend on top of the already stellar 28% jump in the full year pay-out to 6p. Yet those inarguably strong figures were overshadowed by a worrying softness in the company’s viewership, audiences shrinking by 3% across the 12 month period as new failures like Jekyll and Hyde joined the increasingly creaky nature of its flagship shows, epitomised in the decline of former ratings juggernaut The X Factor.
Following that ratings shock ITV managed to climb back above £2.40 in the second half of March, chugging along without much movement until the middle of April, when the stock took another tumble. That fall was exacerbated last week as Deutsche Bank reiterated its ‘sell’ rating, stating that hopes of a second half recovery are ‘too optimistic’. ITV PLC now sits at a current trading price of £2.19 (IT-Finance.com, 10/05/2016).
In terms of the company’s first quarter figures on Thursday, analysts are expecting ITV to post a 12% rise in revenue, despite a near complete halt in ad revenue growth, thanks to the continually robust nature of its production division.
ITV PLC has a consensus rating of ‘Buy’ with an average target price of £2.79.
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