Insight Analysis: Media Stocks Show Across The Board Declines As Outlook Deteriorates
For media stocks the short- to medium-term situation is now looking even worse than it did before the tragedy in the US, when there was already a worry of impending full-scale recession. Advertising levels are likely to drop as media devote much of their space to coverage of the events now unfolding in the States and around the world (see Forecasts).
The graph below shows the extent to which the value has fallen out of the media sector over the past three months. On average the media stocks listed in Insight’s Sharewatch section have fallen by 24.7% during this period, with every company except Tempus showing a decline. Tempus’ stock has been boosted by the bidding war for the company which has emerged between WPP and Havas (see EC Clears Proposed Takeover Of Tempus By Havas).
Analysts are now not expecting any recovery in the advertising market until well into 2002, with further downgrades still definitely on the cards. The television sub-sector is particularly weak throughout Europe.