ITV Stock Hits Latest All-Time High as Analyst Touts Upside

Liberum Capital's Ian Whittaker raises his price target on the U.K. TV company, citing ad trends and retransmission revenue opportunities.

LONDON – The stock of U.K. TV group ITV on Thursday set its latest all-time high after a bullish analyst report recommended it to investors.

Liberum Capital analyst Ian Whittaker raised his fair value target on the stock, whose possible further upside industry observers have been discussing in recent weeks.

ITV shares have had a strong run-up this year and have hit all-time highs as the company, led by CEO Adam Crozier, has continued to diversify its business beyond advertising revenue. The firm's growing TV production business is a key part of that trend.

ITV shares rose in early Thursday trading, going as high as $3.10 (1.93 pounds), a new all-time high.
While some analysts have said there might be limited further upside in ITV's stock, Whittaker on Thursday maintained his "buy" rating on it. He also raised his fair value target from $3.70 (2.30 pounds) to $4.10 (2.55 pounds).

"Feedback from the media buying space suggests increased momentum in U.K. TV advertising for the second half of 2013 and into 2014," the analyst wrote in a report. "We upgrade adjusted earnings per share forecasts by 5.5 percent for fiscal year 2014, respectively."

He also boosted his 2013 ITV TV ad growth forecast from 2.6 percent to 3.4 percent.

Next year, ad results should be boosted by the World Cup in Brazil and improving economic growth, Whittaker argued. "ITV is in an excellent position to take share," he wrote. "It will show the World Cup given its excellent ITV1 audience performance year-to-date and the weakness of main rival Channel 4."

In addition, "retransmission revenues offer substantial upside not reflected in forecasts," Whittaker said. He estimates ITV earnings could get a boost of around $160 million (£100 million) from retransmission payments from pay TV operators, which are only starting to emerge as a possible new revenue stream in the U.K.

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