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FTSE's slide continues while ITV hit by sell note

Discussion in 'Market News' started by Lily, Feb 8, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Analysts say broadcaster is underperforming advertising market

    As markets continue to slide, ITV is among the biggest fallers after a sell note from Deutsche Bank.

    After hosting a conference call with four UK media buyers, the bank said the UK market had started the year strongly but ITV was lagging:

    First quarter consensus for the UK TV market was +5% to 6%. A number of forecasts had been cut recently on weakening retail spend; supermarkets and DIY particularly cited. ITV was seen up 2-3% underlying, underperforming the market with C4 particularly strong.

    There are solid grounds to expect ITV to perform better in the second quarter. It has Euro2016 rights, easier comps and C4’s strong start to the year was seen as likely to reverse. 2016 was seen up +3-3.5% for ITV ex-Player (+6% to 6.5% headline). But market consensus for ITV Family net advertising revenues at +4% is now relying on a far stronger second quarter (comps toughen in the third and fourth quarter from the Rugby World Cup). Moreover, revisions since the start of the year have seen some 5-6% estimates, which look very demanding. Deutsche Bank ITV Family net advertising revenues +2%; 6% below consensus EPS (16.9p). Our estimates are unchanged.

    With China celebrating the Lunar New Year it was hoped that Chinese growth concerns would be absent from markets this week but monthly data showing a fall in the country’s foreign reserves has created some additional uncertainty surrounding official policy towards its exchange rate.

    European markets after initially opening higher, have been led sharply lower by banking shares, a number of which are hitting multi-year lows. The disappointing earnings across the sector from the big US firms to Credit Suisse and Deutsche Bank in Europe alongside the ugly spectre of negative interest rates have seen investors significantly reassess the chance of an earnings turnaround after years of regulatory fines for past misdeeds.

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