ITV PLC (LSE:ITV) shares have been downgraded by UBS to 'sell' as it expects guidance for advertising revenue this year to be slashed at the FTSE 250 group's update next Tuesday, 15 April.
The Swiss bank said there were three reasons for its downgrade from its previous 'neutral' rating, the first being that it expects the broadcaster and TV studio to report a 2% fall in ad revenue for the first quarter and guide for a second-quarter decline of 11%.
Analysts think that this will drive consensus downgrades for the full year for total advertising revenue, with the City average forecast currently only expecting a drop of around 1.6%.
The other two concerns are around medium-term digital revenues and "value crystallisation" of the ITV Studio business.
UBS said ITV’s digital platform ITVX is seeing growing pressure from competing video-on-demand services such as Amazon Prime Video, which delivered 21% more streaming hours than ITVX in 2024, based on Barb data.
The bank's analysts do not expect ITV’s digital ad revenue to exceed 50% of total ad revenue until 2030.
They also said it does not expect the company to unlock value by a sale of ITV Studios in the near term.
UBS cut its 2025 adjusted EBITA forecast by 11% and reduced 2025 EPS estimate to 7.5p from 8.3p.
Its price target was cut to 63p from 73p, based on a sum-of-the-parts valuation.