UBS highlights catalysts for ITV's shares, lifts target price

10th Oct 2014 12:31

UBS has upped its target price for broadcaster ITV from 210p to 230p and repeated its 'buy' recommendation, highlighting catalysts for the stock in the near term.Retransmission fees, M&A and a "compelling valuation" were cited as reasons behind the bank's positive investment case on ITV.Analyst Tamsin Garrity expects retransmission fees to be introduced in 2015-2016, which could lead to a £30-per-annum uplift to ITV's profits. This prediction, she explained, is not yet accounted for in consensus forecasts given that the quantum and timing of the change is unknown and uncertainty remains.As for M&A, Garrity reckons that US media giant Liberty, which bought a 6.4% stake in ITV in July from BSkyB, could potentially look to increase its ownership.Nevertheless, even without any further deals, ITV's valuation and the company's potential to announce a cash return should "increase interest from investors"."Given the catalysts which are not macro related, we reiterate our 'buy' on ITV and highlight that ITV is on our 'Alpha Preferences Most Preferred List'," Garrity said.ITV's shares were down 1.05% at 198p by 12:50 on Friday, slightly outperforming the wider FTSE 100 which was down 1.1%.