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On Monday, CFRA analyst Jeff Wong upgraded ITV Plc. (LON:ITV:LN) (OTC:ITVPY) stock rating from Hold to Buy, while also increasing the price target from GBP0.84 to GBP0.93. The new target price implies a price-to-earnings (P/E) ratio of 9.0x for the year 2025, which is a 12% premium compared to the company’s five-year average P/E of 8.0x.
The upgrade is attributed to the growing likelihood of a takeover bid, particularly from the rival group Banijay, which Wong believes could deliver substantial value to ITV shareholders in the short term. The analyst’s optimism is further bolstered by what he considers the undervalued state of ITV’s shares, especially given the strength of its Studios division, known for its successful production of both scripted and unscripted content.
Wong’s positive outlook on ITV is also supported by the company’s robust financial profile, which includes strong cash generation and a solid balance sheet. The analyst has raised the earnings per share (EPS) forecast for 2026 to GBP0.11 from GBP0.10, while maintaining the 2025 EPS projection.
The analyst expects ITV’s profitability to improve further, driven by a moderation in content spending after the significant investments made in ITVX, the company’s streaming service. Additionally, ongoing cost reduction initiatives are anticipated to contribute to non-content savings, enhancing the company’s financial performance.
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