Analyst Upgrades Sky, ITV, Citing "The Year of U.K. TV"

Claudio Aspesi says the company's current valuations are inexpensive and there is more upside potential.

Sanford C. Bernstein analyst Claudio Aspesi has upgraded his rating on shares of pan-European pay TV giant Sky and U.K. TV powerhouse ITV to "outperform" from "market perform."

He called 2015 "the year of U.K. TV."

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Explaining his bullish views, Aspesi wrote in a report: "In the case of Sky, we stand 15 percent above 2016 consensus earnings per share, because we expect 15 percent inflation for the English Premier League [soccer rights] at the upcoming auction" early this year, compared to analysts' consensus expectation of 50 percent."

He concluded: "At current valuations, the upside opportunity is too high to resist."

Discussing ITV, Aspesi said: "The U.K. TV ad market should do well in 2015; rising demand for U.K. TV content and possible further deregulation should provide additional upside over time."

Read more Wall Street's Entertainment Stock Picks for 2015: Disney, Fox, Time Warner

Plus, he added that "the current inexpensive valuation does not reflect a possible takeover offer." John Malone's Liberty Global last year acquired a small stake in ITV.

Email: Georg.Szalai@THR.com
Twitter: @georgszalai

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