ITV slumps as Deutsche says it's lagging sector

Shares in ITV fell sharply on Monday as Deutsche Bank said the broadcaster was lagging the rest of the sector, which has kicked off the year strongly.

Deutsche, which hosted a conference call for investors with four UK media buyers and two advertising forecasters, said: “1Q consensus for the UK TV market was +5% to 6%. A number of forecasts had been cut recently on weakening retail spend; supermarkets and DIY particularly cited. ITV was seen up 2-3% underlying, underperforming the market with C4 particularly strong.”

The bank also pointed out that the inclusion of ITV Player for the first time this year was lifting the company’s year-on-year numbers.

“Player ad revs are around 3% of ITV linear TV ad income. So although ITV was seen up +5% to 6.5% on a headline basis, on a like-for-like basis this is 2-3%,” it said.

Still, looking ahead it said full year consensus was not immediately under threat, although risks are skewed to the downside.

DB expects the broadcaster to perform better in the second quarter.

“It has Euro2016 rights, easier comps and C4’s strong start to the year was seen as likely to reverse,” it said.

DB rates the stock at ‘sell’ with a 220p price target.

At 1328 GMT, ITV shares were down 5.6% to 241.20p.