JPM downgrades European broadcasters MFE, Atresmedia amid Ukraine crisis
18/03/2022 16:32
** JPMorgan reviews European media stocks, downgrading
broadcasters MediaForEurope (MFE) MFEB.MI and Atresmedia
A3M.MC to "neutral" from "overweight"
** "Broadcasters fit with our strategists' preference for
value and cyclicals. However, our economists have cut their GDP
forecasts given the war in Ukraine and there is a risk that it
will slow advertising / earnings momentum," JPM says
** Cuts free-to-air TV advertising growth forecast for FY by
around 4% and agency organic growth forecast by 2%
** A broader slowdown in TV and digital advertising seems
"likely" - brokerage
** Says MFE and Atresmedia are "purer plays" on advertising,
with higher debt and lower margins vs peers
** Its "key picks" are UMG UMG.AS , WPP WPP.L and ITV
ITV.L , all at "overweight"
** "UMG's net content investment ... will drive future
growth," JPM says; it expects a decade of double-digit growth
for the music industry
** Expects strong growth for WPP in 2022, thanks to cost
savings which should support margin expansion and underpin
investments
** For UK-based ITV, the broker believes that an extended
video day, inelastic demand for TV advertising, and structural
growth in its audience will offset gradual decline in linear
audiences
(Reporting by Olivier Sorgho)
((Olivier.Sorgho@thomsonreuters.com; +48 58 769 66 54;))