Numis upgrades ITV to 'buy' after "very strong" results for 2014

4th Mar 2015 09:29

ITV, which impressed City analysts with its annual results on Wednesday, received a further boost from Numis Securities as the broker upped its rating on the broadcaster and producer from 'add' to 'buy'.The broker said that following recent share-price weakness it has returned to a more positive stance and upgraded its target price from 260p to 275p.Total revenue at ITV rose 8% in 2014 to £2.59bn with net advertising revenue (NAR) up 6% at £1.63bn, helped by the World Cup, strong growth in online, pay and interactive and good progress in ITV Studios.Adjusted profit before tax (PBT) jumped 23% to £712m, well ahead of Numis' £675m forecast."ITV has reported very strong final results, with earnings per share of 13.7p well ahead of Numis' estimate of 13.0p and consensus of 13.2p, while the group has also declared a £250m/6.25p special dividend," the broker said.Furthermore, ITV expects NAR to be up 11% in the first quarter and 4-7% higher in April, "though the remainder of Q2 will be impacted by the tough World Cup comparative", Numis pointed out.Nevertheless, the broker has raised its 2015 NAR forecast from +1% to +3%, adding a further £25m to its PBT estimate. As such, after factoring in the better-than-expected 2014 results, it has hiked its 2015 PBT forecast from £720m to £770m.The stock was up 4.5% at 231.7p by 09:48 on Wednesday following a near-4% drop over the past month.