ITV share price: Hargreaves Lansdown points to uncertain outlook for broadcaster

on Mar 2, 2017
Updated: Mar 11, 2020

The outlook for ITV (LON:ITV) remains uncertain, analysts at Hargreaves Lansdown have said. The comments came after the blue-chip broadcaster posted a drop in advertising revenue for 2016, while cheering investors with a special dividend.

ITV’s share price has slipped into the red in London this morning, having shed 0.66 percent to 210.30p as of 08:21 GMT. The stock is underperforming the broader London market, with the benchmark FTSE 100 index having climbed 0.08 percent to 7,388.76 points. The group’s shares have lost nearly 13 percent of their value over the past year, but are up by almost two percent in the year-to-date.
Hargreaves Lansdown has weighed in on ITV’s full-year results released yesterday, arguing that despite the special dividend, the group’s outlook remained uncertain. The broker’s analyst George Salmon explained that the broadcaster’s dependence on the cash it generates from selling its ad space brought up concerns on two fronts.

“The first, that customers are less likely to splash out on TV ad campaigns when the economic outlook is uncertain, is hopefully a short-term worry. The second problem, however, is potentially more endemic,” Salmon said, as quoted by Citywire, pointing out that “longer-term viewing habits are clearly moving towards a more on-demand set up”, which brought the UK broadcaster into competition with Amazon and Netflix, “two pretty bruising rivals with deep pockets”.

The comments came as ITV cautioned in yesterday’s results that net advertising revenues is expected to fall six percent over the first four months of the current year, impacted by current economic uncertainty. The blue-chip broadcaster, however, expects to outperform the TV ad market over the full year.
Other analysts have been more upbeat, with Shore Capital reiterating its ‘buy’ rating on ITV yesterday, without specifying a price target on the stock. Credit Suisse meanwhile continues to see the FTSE 100 group as an ‘outperform,’ valuing the shares at 240p.
As of 08:40 GMT, Thursday, 02 March, ITV plc share price is 209.30p.