The media sector was under scrutiny from brokers today, seemingly unable to disagree on the general outlook of the sector.
UK broadcaster ITV PLC (LON:ITV) has had its price target downgraded by Credit Suisse to 200p from 255p.
The Swiss banking giant says because of “the UK’s decision to leave the EU last week and feedback from UK [advertising] buyers this week”, the group has trimmed its earnings per share (EPS) forecast for 2016 and 2017, by 4% and 14%, hence the price cut.
On the contrary, Liberum, which released a bullish report on free-to-air broadcasters today, repeated the stock as its ‘top buy’ recommendation, as well as reiterating its price target of 375p.
In the note, the broker also repeated its ‘buy’ recommendation and target price of 580p for Scottish broadcaster STV Group PLC (LON:STVG).
Elsewhere on the media front, Liberum reiterated its ‘buy’ recommendation and 275p share price target for newspaper and magazine publisher Trinity Mirror PLC (LON:TNI).
The broker says that the 28% drop in Trinity Mirror’s share price since the referendum result makes the stock “look very cheap”, especially as “circulation revenues may be boosted by the current political uncertainty”.
Liberum also says that “the effectiveness of newspapers as an advertising medium has been crystallised” as a result of Brexit, which should bode well for the future.
Berenberg has cut its share price target for TV, internet and telephone services firm Sky PLC (LON:SKY) to 730p from 784p.
The bank says it doesn’t buy into management’s idea that Italy and Germany present a “huge opportunity” for the company.
“We do not think pay-TV in Italy and Germany will ever be as profitable or successful as in the UK,” it said in a note today.
Pizza firm Domino’s Pizza Group PLC (LON:DOM) has had its share price target slashed by the same bank to 400p from 1200p, although the bank still repeated its buy recommendation for the stock.
Oil and gas explorer Tullow Oil plc (LON:TLW) has been downgraded by Cantor Fitzgerald to ‘sell’ from ‘hold’, with the broker also reducing its target price to 163p from its previous 253p.
West African guidance is “down significantly” year-on-year and Cantor expects this to “clearly impact the company’s operational gearing” over the second half of the year.
It adds that it is uncomfortable with Tullow’s escalating net debt position, especially “against the backdrop of disappointing production guidance.”
On to the small caps, and Northland Capital Partners has repeated its ‘speculative buy’ rating for Premier African Minerals Ltd (LON:PREM).
Northland notes that process development is now underway atPremier’s Zulu lithium project in Zimbabwe.
Liberum has repeated its ‘buy’ recommendation and 46p target price for Xcite Energy Ltd (LON:XEL).
It says the oil firm is continuing to make “sensible progress” in challenging market conditions, although it notes that the recent boardroom reshuffle – necessary to cut costs – could be have a negative short-term impact.