Bernstein upgrades ITV to 'outperform', shares surge

Bernstein, which trimmed its price target to 124p from 125p, said the investor reaction to ITV's new streaming platform ITV X and the accompanying investment plan has been brutal, with the stock down 33% - a £1.5bn value erosion - since the announcement.

"We think a steep margin reset now beats waiting to see just how bad the terminal growth would get otherwise," it said.

"After the pain there should be at least some gain, even if none is being priced in now.

"Looking beyond immediate cash flows might not be popular this year, but ITV's plan looks to us like a serious effort to tackle the company's classic case of innovator's dilemma.

"It may or may not be too late but isn't too little, and even a chance to avoid a terminal advertising decline represents upside from these levels."

At 1310 GMT, the shares were up 9% at 80.08p.