RE: Sp10 May 2024 19:43
In a non-recessionary market, both ITVX and Studios should be generated at least 2-3 times higher revenues. With projected profit margins, the value of ITV as a whole could then easily be put in the range of £5-7 billion. And these are the optimistic forecasts of some analysts, as well as my own. The market is always pricing in the future. Merely entering the FTSE100 index means an increase in the company's value by 10 to 20% in the long run. And this is where the valuation of £1.2-1.5 quickly comes into play. If the company maintains the dynamics of revenue growth at the announced levels, in 2025 its valuation should increase at least three times from the current level, around 75 pence. The upward trends of the current cycle in the UK economy should continue until at least 2027. This bodes very well for future earnings and dividend levels going to shareholders. Of course, all this is a matter of time. But today we are virtually assured of a sharp increase in revenue and profit levels until at least the second quarter of 2025. This will be reflected in the market valuation.
I have already talked about the issue of a possible takeover in the past. It will not happen without the consent and active support of the largest shareholders. This will be realistic for me at a price above £2 per share, strongly supported by current revenues, growing profit and forecast dividend. And this may be possible already in the third quarter of 2025, provided that the company's optimism is fulfilled and external conditions do not delay the entire process. We have a couple potential buyers on the market. If ITV lives up to expectations, others will probably follow. Anyway, it's worth the wait, I guess.
So my optimism results from specific facts (I discussed some of them earlier and omitted them here) and I think we are well on our way to making it come true.
If ITV were an American company listed on the NASDAC market, its valuation today would have long exceeded £2 or £3 and no one would be surprised. From the UK perspective, we know that it is cheap, but we still think that it should and must be so. For me, this is a picture of the immaturity of local investors who wake up after their companies are taken over by others for next to nothing.