ITV: buying opportunity or value trap?
A cost-cutting strategy, investment in digital services and focus on innovative products could strengthen the broadcaster’s market position. But the weight of a tough outlook for advertising - still the company's biggest revenue contributor - is preventing share price growth for now. ITV has crashed out of the FTSE 100 very dramatically after a torrid few months. This article examines whether there is any way back for the company.
ITV’s (LON:ITV) financial and operational performance has suffered greatly from Covid-19 lockdown measures and that is reflected in the weak share price. But, for long-term investors who are prepared to be brave, the uncertain outlook provides a buying opportunity. Although revenue could decline further in the short run, the group’s innovative strategy and digital focus provide clear catalysts for growth. In the meantime, it is cutting costs to strengthen its balance sheet and appears to have the financial strength necessary to survive short-term difficulties and should be well-placed to benefit from an economic recovery. A challenging outlookITV’s recent performance has…