Broker snap: Wait and see at ITV

9th Aug 2010 12:47

ITV's interim results showed a marked improvement in financial performance, but it was the strategic review of new chief executive officer Adam Crozier that the market was most focused on, and Charles Stanley believes it remains unclear whether the new strategy can move the terrestrial broadcaster from 'a story of managed to decline to one of sustained earnings growth.'Charles Stanley is sticking with its "hold" recommendation for now as the shares look fairly valued. It awaits "further improvement in advertising trends or early signs that the new strategy is starting to deliver before turning more positive.""ITV remains a unique platform for advertisers to access mass audiences, has a world class TV production business and one of the world's largest commercial TV programme archives. We are concerned, however, that revenues may remain under pressure from ongoing structural change in media markets and the antiquated regulatory regime," said analyst Sam Hart.The broker has raised its 2010 earnings per share (EPS) forecast by 8% to 4.1p following the interim results, to reflect improved advertising revenue assumptions. In contrast, the forecast for 2011 EPS is cut by 3% to 5.0p, due to increased investment.