Shares in ITV PLC (LON:ITV) edged higher this morning after City broker Liberum pushed up its full-year advertising revenues forecasts.
Nearly all of the major broadcasters, and not just those in the UK, have seen their ad revenues come under pressure over the past year or so as big retailers and consumer goods firms hold back on their spending.
READ: ITV says pressures on advertising income to ease in the third-quarter as it posts in-line first-half results
Liberum analyst Ian Whittaker said in a note today there are signs that the purse strings are starting to loosen a little bit once again.
“Our view has been that ITV’s TV advertising weakness has not been caused by a structural shift of money going to platforms such as YouTube but because of two specific sectors, FMCG (fast moving consumer goods) and traditional retailers, which is more UK specific, holding back spending.
“There are some signs this is reversing out. Our conversations, not just in the UK but also in the US, suggest FMCG ad spending is starting to come back. Meanwhile, the positive trading update from Next could encourage other retailers to spend into the crucial Q4.”
READ: Macquarie tunes out of ITV, downgrades to 'underperform' as mass advertisers being eroded by internet
Whittaker has upgraded his 2017 advertising revenue forecasts to between -2.5% and -4.5%, given the improving conditions and “what looks like a relatively good September”.
With that in mind, the analyst has upped his earnings per share forecast for the year by 4% to 17.7p, while he’s also added another 10p to his target price which now stands at 330p.
ITV shares gained 1.2% in late morning trade to 169.5p.