UBS bullish on 'underappreciated' Aussie media sector on strong ad forecast

ARN Media

11/11/2022 24:43

** Analysts at UBS recommend "buy" on all major Australian
media stocks on expectations of strong consumption in FY23
driving ad and digital spending
    ** Brokerage expects Reserve Bank of Australia (RBA) to cut
rates by 100 basis points in 2H23 for a soft landing as
inflation cools faster than expected by the central bank
    ** Forecasts private consumption growth of 13.9% at current
prices in FY23, suggesting a "more supportive environment for
media ad market spend"
    ** Says sector is "underappreciated" given its more dovish
view on peak interest rates and real GDP growth 
    ** Estimates media ad spend to have grown 17.7% in FY22 to
A$18.3 bln ($12.09 bln), with digital the key driver at +21%
    ** Expects growth in broadcaster video on demand (BVOD) to
offset any structural headwinds for traditional linear broadcast
TV
 Company               Rating  Price Target (A$)
 HT&E                  Buy     1.85
 News Corp             Buy     35.2
 Nine Entertainment    Buy     2.9
 Seven West Media      Buy     0.85
 Southern Cross Media  Buy     1.8
     ($1 = 1.5140 Australian dollars)
 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))