Shares in Sky (LON:SKY) have inched marginally lower in London this morning, as analysts at Credit Suisse trimmed their stance on the pay-TV provider. The broker, however, hiked its valuation on the shares to bring it in line with last week’s takeover offer from 21st Century Fox.
As of 10:20 GMT, Sky’s share price had lost 0.10 percent to 985.50p, in line with losses in the broader London market, with the benchmark FTSE 100 index currently 0.11 percent worse off at 7,033.98 points. The group’s shares have lost more than 11 percent of their value this year, as compared with a 12.6-percent rise in the Footsie.
Credit Suisse lowered its stance on Sky from ‘outperform’ to ‘neutral’ today, while lifting its price target on the shares from 980p to 10.75p, to bring it into line with the offer from 21st Century Fox. Sharecast quoted the analysts as explaining that potential upside of about nine percent at some point within a 12-month time frame was insufficient to maintain an outperform rating on the shares, given regulatory risk and uncertainty.
The comments come after 21st Century Fox made a firm offer for the UK group last week, valuing the company at £10.75 per share.
The bank further cautioned that Fox had indicated that the proposed transaction could take up to a year to close, including getting regulatory approvals from the UK and the EU, as well as shareholder approval via a scheme of arrangement.
The 19 analysts offering 12-month price targets for Sky for the Financial Times have a median target of 1,075.00p on the shares, with a high estimate of 1,400.00p and a low estimate of 400.00p. As of December 21, the consensus forecast amongst 19 polled investment analysts covering the pay-TV provider has it that the company will outperform the market.