Broker snap: Nomura lifts target for ITV on ad momentum

20th Nov 2013 09:28

Nomura has reiterated its 'buy' rating for terrestrial broadcaster ITV on the back of this week's solid trading update from the company combined with continuing advertising momentum.Revenues for the first nine months of the year were up 6% at £1.664bn, in line with Nomura's expectations, with third-quarter ITV Family advertising up 11%."Continuing improvement in UK macro and the UK advertising market helped ITV to deliver robust 4Q advertising guidance with ITV Family advertising expected to be up c4.5% in 4Q," the broker said.As such, Nomura has raised its fourth-quarter ITV Family ad growth forecast from 3% to 4.5%, and full-year forecasts from 1.5% to 2%.Along with the company's guidance for higher-than-expected cost savings, the broker has raised its target price for the stock from 200p to 210p."ITV trades at a 2014 price-to-earnings ratio of 14.6x, which is a 8% discount to ProSieben while ITV's current multiple remains 6% below its median through the cycle 2005-09 level and 35% below its peak 2007 multiple. "With ITV benefiting from its leveraged position on UK macro/advertising improvement, we remain 'buyers'," Nomura added.ITV was swinging between gains and losses on Wednesday morning but was trading down 1.03% at 182.8p by 10:36.BC