Broker Tips: ITV, Sky, Ladbrokes, William Hill, Hiscox

14th Jul 2015 11:22

(ShareCast News) - ITV was under the cosh in early trading after Deutsche Bank downgraded the stock to 'sell' from 'hold'.The broker said the UK broadcasting market has been "kind" to ITV, noting that Channel 5 had its programming budget slashed and Channel 4 has focused on its public service remit and lost its most commercial series. However, this isn't for much longer, said DB."We find the upside case of retransmission fees, Liberty takeout and cash returns/dividends unconvincing," said the bank.The bank also noted that five years into the 2010 turnaround plan to reinvigorate ITV Studios, growth is still mainly coming from acquisitions, with true organic growth less than 4%.Deutsche Bank upgraded their rating for Sky from 'hold' to 'buy' and raised estimates for 2017 by 20% more than consensus.In a note to clients, Deutsche Bank said the FSTE 250 firm was the best positioned in Europe to capitalise on growth areas related to online video.Deutsche Bank moved its price target for the stock from 1,000p to 1500p, and said Sky had underperformed against its media peers.London-listed bookmakers Ladbrokes and William Hill were feeling the pinch in early trade after downgrades by Credit Suisse.The bank cut its stance on Ladbrokes to 'underperform' from 'neutral' and reduced the target price to 85p from 115p. At the same time, it downgraded William Hill to 'neutral' from 'outperform' and cut the target to 420p from 455p."Between 2012 and 2015, changes in regulation in the UK have led to earnings downgrades of 28% for William Hill and 46% for Ladbrokes in 2015E. Despite this, consensus forecasts assume no further regulatory change," said CS.As far as regulator change is concerned, it reckoned headwinds are likely to continue in the medium term.Elsewhere, Credit Suisse downgraded Hiscox to 'underperform' from 'neutral' but raised its target price on the stock to 720p from 655p."Whilst we continue to believe that Hiscox's exposure to retail customers has the ability to offset partly the negative trends seen at peers, the group trades at an all-time high premium to peers which we struggle to justify," it said.The broker said Hiscox is a high-quality, low volatility and well-capitalised operator. Its differentiated product mix provides the group with higher growth prospects than peers as it seizes opportunities with retail clients, said CS.