In the wake of the pay-TV and broadband bundler’s trading update the City is largely agreed that Sky Plc’s (LON:SKY) is up with events, nevertheless chartist Zak Mir reckons the shares may be worth picking up, but only on the dips.
Sky on Thursday announced a 5% rise in like-for-like sales in the UK & Ireland, as well as growth in Germany, Austria and Italy – but the market appears to have more or less found the stock’s level.
That said, Zak ‘King of Charts’ Mir sees an uptrend for the FTSE 100 share and notes that technically minded traders would look to pick up shares a little lower than the current price.
In a Tips TV segment for Proactive Investors Mir says 850p or thereabouts is the zone to buy, and he says the top of the trend would be up towards 950p.
WATCH Zak Mir’s analysis of Sky right now
“The top of the range is towards 950p. The 200-day moving average is at 945p.So, one would be a buyer on dips,” he said.
Elsewhere today, one City analyst downgraded Sky in the wake of the first-quarter figures.
Shore Capital’s Roddy Davidson has gone to ‘hold’ from ‘buy’ after reviewing his “fair value calculations”.
He is one of seven analysts following Sky that hold ‘neutral’ ratings on the shares.
A further 10 are ‘buyers’ or ‘strong buyers’, with only two sellers, according to the Broker Forecasts site that tracks stock recommendations.
Sky’s shares, which have fallen 23% in the year to date, were friendless in afternoon trade as they eased a further 2%.
The pay-TV giant reported sales were up 5pc to £3.1bn in the three months ended September.
Subscriber numbers rose by 106,000 over the period but that was lower than last year's rise of 134,000.
Advertising revenue in the UK and Ireland fell 3%, although the company said that was better than the overall market.
Despite the downgrade, Shore analyst Davidson was reasonably upbeat on Sky’s financial performance.
“We are encouraged by the revenue, headline cost, and operational momentum summarised in this morning’s update, and are positive on Sky’s business model, and track record of growth, innovation and customer focus,” he said in a note to clients.
“We see revenue growth potential from a combination of existing and new customers and a range of new product initiatives going forward and (although some challenges must be overcome) expect further progress by Sky Italia and Sky Deutschland to make a useful contribution to medium-term progress.”