ITV (LON:ITV) could be about to beat expectations, according to Liberum, which already rates the stock as a ‘buy’ with a 330p target price (current price 255p).
The broker said it has been tipped off by a media buyer that the broadcaster is having “a good” Rugby World Cup for advertising - the tournament actually starts next month.
“While no quantification of the advertising number, our view is this probably means October is up at least high single-digits,” the City broker said in a note.
“Given ITV is predicting 6% for the 9m and December is a relatively small month, this suggests that ITV is on track to beat FY15E consensus advertising growth forecasts of 5%+.”
Liberum highlights that every 1% increase to advertising growth equates to a 2% positive impact for earnings per share.
Elsewhere in the City, engineer AMEC Foster Wheeler (LON:AMFW) was upgraded by Barclays to ‘overweight’.
Jefferies upgraded Compass Group (LON:CPG) to ‘buy’ from ‘hold’ and analyst Ian Rennardson said the support services firm “has not lost its direction”.
“The recent 15% pull back gives us the opportunity we were looking for to become more positive on Compass shares,” the analyst said in a note, as the price target was lifted to 1200p from 1100p.
“Weakness in its commodity and energy related contracts will be temporary and the underlying business model continues to perform consistently well.”
UK power generator Drax (LON:DRX) was cut to ‘underperform’ from ‘sector perform’ by RBC Capital Markets.
Both Deutsche Bank and Jefferies kept recommendations for Glencore (LON:GLEN) to ‘hold’ and ‘buy’ respectively but targets moved to 265p from 270p and 370p from 410p.