Broker snap: Investec keeps 'sell' stance for ITV

13th Nov 2012 09:13

In spite of a 'positive' third-quarter trading update from terrestrial broadcaster ITV, Investec has retained its 'sell' rating and 75p target price for the stock.Excluding viewing share figures, the broker says that the third-quarter statement is positive with costs and ITV Studio profit coming in better than expected. Cost savings are now expected to be £30m for the full year, £10m ahead of previous estimates."This implies the shares may rise today, though unattractive long term in our view given free-to-air TV pressure," said analyst Steve Liechti.Investec has raised its full-year 2012 earnings per share (EPS) forecast by 4% to 8.6p its 2013 estimate by 4.5% to 9.3p due to the extra cost savings and Studios profits.As for the outlook, ITV expects net advertising revenue (NAR) to be flat this year, "so 4Q is not looking as bad as some negative press comments suggested," Liechti said.Nevertheless, the broker maintained its negative view on the shares today, highlighting key risks, which are: "poor long-term TV ad market dynamics; ad market uncertainty; and acquisition execution risk".Shares had jumped 5.47% to 91.55p in mid-morning trade.BC