JPMorgan Cazenove has turned bullish on ITV (LON:ITV), arguing that the European sector is markedly undervalued by the market. The analysts, however, lowered their price target on the blue-chip broadcaster.
ITV’s share price lost ground in the previous session, shedding 1.14 percent to close at 146.90p, underperforming the broader UK market, with the benchmark FTSE 100 index closing 0.30 percent higher at 7,411.34 points. The group’s shares have lost more than 13 percent of their value over the past year, and are down by some 28 percent in the year-to-date.
JPMorgan upbeat on ITV
JPMorgan Cazenove lifted its recommendation on ITV from ‘neutral’ to ‘overweight’, while trimming its 12-month price target from 204p to 185p on the shares, with the group’s stock having dipped below the 150p level for the first time since 2013.
The analysts argue that cheap valuations, low expectations and overstated structural concerns were among the main reasons for their positive view on the sector.
“The market has extrapolated from short term ad weakness to overstate structural concerns while it is overlooking new opportunities for growth,” the broker’s analyst Daniel Kerven commented in a note yesterday, as quoted by WebFG News.
The comments come after the FTSE 100 broadcaster recently updated investors on its third-quarter performance, posting a drop in advertising revenue. The group, however, confidence that pressure in the advertising market will ease going forward.
Other analysts on ITV
The 21 analysts offering 12-month price targets for ITV for the Financial Times have a median target of 210.00p, with a high estimate of 330.00p and a low estimate of 110.00p. As of November 21, the consensus forecast amongst 22 polled investment analysts covering the blue-chip broadcaster has it that the company will outperform the market.