In a note entitled Pigs Won’t Fly, the veteran media analyst applauded the broadcaster’s caution and its unwillingness to overpay.
Restating his ‘buy’ advice and 330p a share price target, DeGroote said: “Whilst ITV has synergies to derive in an ETO deal – not available to a private equity buyer – we consider it could be a deal too far, and perhaps even a minor poison pill.
“We would thus now expect a minor relief rally in ITV shares.”
In fact, ITV shares opened flat at 230p each.
Elsewhere in Brokerville, it was a very dull day. There was an upgrade and a downgrade in the bookmaking sector with Berenberg going to ‘buy’ from ‘hold’ on Ladbrokes (LON:LAD) and AlphaVlaue moving to ‘reduce’ from ‘buy’ on William Hill (LON:WMH).
It expects BAE to unveil what it describes as a “material increase” in the order book when it updates the City on progress.
In the oil and gas sector Sound Energy received a name-check from finnCap’s Dougie Youngson who repeated his ‘buy’ on the stock and 104p target after the company confirmed it had begun drilling a second well in Morocco.
Cantor Fitzgerald is a fan too and reckons the shares are worth 101p. “The shares have continued their strong rally following encouraging results at the company’s last well, but we believe the current valuation remains undemanding ahead of two transformational wells,” said analyst Sam Wahab.
The lead analyst Neil Glynn and his team heard enough to re-assure them the budget carrier would hit earnings guidance for year even with some tough headwinds.