Deutsche Bank downgrades ITV on balanced risk/reward

The bank said that in the longer term, it’s positive on the broadcaster’s ability to stabilise revenue as it should be able to offset the decline in linear TV advertising revenue with growth in online advertising and other digital avenues such as SVOD subscriptions.

"However, ITV’s decision to aggregate its streaming platforms into one new platform, ITVX, due to be launched in Q4-22, comes with added costs related to content and launch - and prompts our move to the sidelines," it said.

"We think there will continue to be a risk of increasing investments to make the platform compelling versus global peers already in the market."

DB said that while management expects incremental revenue from the initiative to offset incremental costs by 2026, in the near term we are likely to see more front-loaded costs impacting margins.