Shares in ITV (LON:ITV) have suffered a hefty loss this Thursday as Bank of America Merrill Lynch lowered its rating on the stock. WebFG News reports that the analysts have turned more cautious on the European media sector.
As of 14:21 GMT, ITV’s share price had given up 6.43 percent to 128.42p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.77 percent lower at 6,810.11 points. The group’s shares have lost a little more than 22 percent of their value over the past year, as compared with a near 12-percent dip in the Footsie.
BofA Merrill Lynch trims rating
BofA Merrill Lynch lowered its rating on ITV from ‘buy’ to ‘underperform’ today, and trimmed its price target on the shares from 210p to 110p. WebFG News quoted the analysts as pointing to a decline in TV ad trends, noting that following three consecutive years of more than five-percent growth, the UK TV ad market slowed down to one-percent growth in 2016, dropped two percent in 2017 and will end up flat in 2018. The broker expects the TV ad market to drop by two-three percent in 2019/20.
“ITV’s on screen performance has been very strong in 2018 with audience share up 180 basis points to 23.3 percent. However, given the discussed fall in TV viewing, ITV absolute viewing (in hours/minutes) itself is just stable,” BofA Merrill Lynch said, adding that similarly to other broadcasters, the company was “suffering from rapid aging in its viewer base”.
Other analysts on FTSE 100 group
The 16 analysts offering 12-month price targets for ITV for the Financial Times have a median target of 162.50p on the shares, with a high estimate of 260.00p and a low estimate of 110.00p. As of January 16, the consensus forecast amongst 20 polled investment analysts covering the blue-chip group has it that the company will outperform the market.
As of 14:51 GMT, Thursday, 17 January, ITV plc share price is 128.42p.