The media firm has been all over the place in 2018. Opening at £1.65, it had plunged to £1.42 by the start of April – nearing a 5 year low – only to rally to a 13 month peak of £1.83 by early July. Since then its performance has been a bit more consistent; sadly for the stock, that’s consistently bad, with the company tumbling to £1.43 by the end of October. ITV PLC now sits at a current trading price of £1.53.
There was actually a lot to recommend in July’s half year update. A 16% increase in revenue at ITV Studios and a 2% jump in advertising revenues (with a 48% surge online) helped lead to an 8% leap in the total figure to £1.593 billion, with pre-tax profits up 2% to £265 million. This as Love Island and the World Cup – including huge numbers for England’s semi-final against Croatia – caused a 9% lift to ITV Family’s share of viewing during the period.
The company went on to state that it intends to invest £60 million over the next 3 years, in part offset by cost savings of £35-40 million, with that money largely earmarked for the expansion of its production of programmes and the further development of its ITV Hub streaming service. Basically, anything to further shift the burden away from the difficult advertising market.
It’s going to be interesting to see what kind of performance ITV has managed in something of a more normal quarter, one that doesn’t have the propulsion of a World Cup/Love Island double whammy. The company itself has said it expects total advertising revenue to rise 1% for the 9 months to the end of September, with Q3 ‘broadly flat against a backdrop of continued economic uncertainty’.
ITV PLC (LON:ITV) has a consensus rating of ‘Hold’ alongside an average target price of £1.89.
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