World Cup fever injects further appeal into ITV shares

16th June 2014

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With the FIFA World Cup now in full swing ITV is in favour among investors with a number of analysts delivering upbeat recommendations on the broadcaster.

The past week has seen brokers at both Goldman Sachs and Westhouse Securities come out in support of the group with both reiterating ‘buy’ recommendations on the shares.

After a period of volatility and uncertainty the firm, which is home to UK audience favourites such as The X-Factor and Downton Abbey, has managed to get itself back on track and over the past 12 months has witnessed its stock jump by no less than 30%.

In its final results for 2013, announced back in February investors were cheered after it delivered double-digit profit growth for the fourth consecutive year, and non-advertising revenues rose by 17% as it benefitted from measures which focused on cash and controlling costs.

While its latest trading update was viewed as being slightly disappointing, with second quarter advertising guidance below expectations, hopes are high that the group’s World Cup coverage may help improve advertising rates.

Graham Spooner, investment research analyst at The Share Centre is the latest broker to give the stock his backing as he believes it is continuing to move in the right direction, with the numbers suggesting that it could have more to offer.

He says: “With so many options now available to consumers, ITV has had to fight hard to maximise its audience share. In a fast changing environment the changes that have been made in the group appear to have come in time to save what was a troubled company.

“With the debt situation addressed, the group has been enabled to make a number of acquisitions over the last year, geared towards boosting its production business. The latest being in May for an 80% stake in US reality show producer Letfield Entertainment. Alongside this, investors should acknowledge that analysts are encouraged by the improvement at its Studios business, with a significant increase in new commissions and its digital offering.”

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