'Stay on the road less travelled'-JPM picks four European media names for 2022

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10/12/2021 12:59

** J.P. Morgan expects another year of recovery and strong
advertising growth in 2022, and remains bullish on value and
cyclicals in European media sector
    ** It sees strong nominal GDP growth, increased competition
and higher ad intensity across multiple sectors to boost global
ad growth to double-digit 
    ** JPM's key picks within the industry are the world's
biggest advertising company WPP  WPP.L , Britain's biggest
free-to-air commercial broadcaster ITV  ITV.L , German
broadcaster ProSieben  PSMGn.DE  and the world's biggest music
label UMG  UMG.AS 
    ** "Broadcasters and agencies remain unloved and
under-owned", it says, seeing scope for further upgrades and a
re-rating for WPP, ITV and ProSieben
    ** UMG remains the best content story in media, and one of
the most tangible plays on the metaverse, JPM says, adding that
it prefers UMG over Believe  BLV.PA  given its catalogue and
cheaper valuation
    ** It points out that after 10 years of Netflix and a
pandemic, TV advertising and margins are at record levels and
structural concerns are demonstrably overstated
    ** "2022 could also kick-start TV consolidation, bringing
savings and strategic benefits", according to the broker 
    ** JPM believes there is growing need for agencies' advice
and execution and that their addressable market is growing

 (Reporting by Anait Miridzhanian)
 ((anait.miridzhanian@thomsonreuters.com))