Shares in broadcaster ITV (ITV), jumped 12% to 123p after reporting better than anticipated third quarter results, prompting analysts to upgrade their full year earnings forecasts.
This marks the continuation of a positive trading pattern established at the group’s interim results in July.
ITV is a double beneficiary of a post Covid-19 bounce-back, as the delivery of a strong pent up pipeline of programmes, coincides with a recovery in the advertising cycle.
ON LINE ADVERTISING- THE STAR PERFORMER
Revenues increased by 28% year on year, and were 8% higher than the pre-pandemic period. Total advertising revenues increased by 30% year-on-year, compared to 29% during the first half.
Third quarter advertising revenue was ahead by 32% year on year, with a particularly strong performance from online advertising that soared by 54% year-on-year.
COVID BOUNCE-BACK
Filming was curtailed for much of the Covid pandemic. However ITV marked a more upbeat note in today’s third quarter release, with the arrival of ITV’s Endeavour, ITV 2’s Love Island (cancelled due to the pandemic), and BBC 1’s Vigil.
Looking forward to the fourth quarter and 2022, ITV is well positioned to benefit from a strong line up of programmes including the latest series of Netflix’s Snowpiercer, and Sky Italy/Canal+’s Gomorrah and Django.
UPGRADE
According to Shore capital media analyst Roddy Davidson ‘on a first-pass basis, we expect at least a mid single digit upgrade to our current year adjusted earnings per share estimates.’
‘We currently estimate? a fair value of 160p per share, suggesting a 46% upside potential’.
