ITV PLC (LON:ITV) saw its shares drop on Thursday as England’s semi-final exit from the World Cup dashed hopes for another advertising boost from its coverage of the tournament, while a downgrade in rating by Goldman Sachs also did some damage.
The US bank cut its rating for the UK commercial broadcaster to ‘neutral’ from ‘buy’ in an otherwise upbeat review of European TV stocks. In late morning trading, the FTSE 100-listed shares were 2.7% lower at 172.6p.
Goldman’s analysts said they see near-term risk/reward more balanced for ITV following recent outperformance by the stock on the back of the World Cup run and its popular Love Island reality TV dating show.
Overall, the bank’s analysts added, however, that they see "compelling opportunities" in the broadcasting sub-sector, which has underperformed against a weaker advertising backdrop across Europe.
They said softer-than-expected TV advertising trends across Europe this year reflect weak demand from large advertisers and a secular shift of ad dollars to digital.
Goldman raised its rating from France’s Television Francaise 1 to ‘buy’ from ‘hold’ and upgraded both Spain’s Mediaset Espana and Germany’s Prosiebensat 1 Media to ‘neutral’ from ‘sell’.