Daily Mail slumps as Panmure downgrades to 'sell'
Shares in Daily Mail & General Trust fell sharply after Panmure Gordon downgraded the stock to ‘sell’ from ‘hold’ and cut the price target to 700p from 760p ahead of the company’s prelims.
Daily Mail and General Trust A (Non.V)
270.00p
16:40 07/01/22
Media
12,522.60
15:45 15/11/24
It said DMGT usually offers its first view of FY16 guidance with its FY15 prelims, which are due on 25 November.
Ahead of this, the brokerage has taken a look at current estimates and found them still looking materially too high.
Panmure cut its 20167 earnings per share estimate by 7% to 58p and its 2017 estimate by 19% to 56.6p.
The brokerage said it recognises that DMGT has an increasingly strong balance sheet, which could boost EPS either by accretive M&A or a new buyback programme. Its long-term forecasts also suggest a return to double digit EPS growth from FY18 onwards, as market pressures ease.
In the near term though, Panmure said it sees the risk of a material reset of numbers with the prelims.
It said the key challenges include tough trading environments in a number of areas, late cycle exposures to these via subscription and events revenues, the potential loss of associate profit contributions (Local World, Zoopla) and potential continued investment in MailOnline.
At 0948 GMT, DMGT shares were down 4.1% at 745.50p.