Shares improved on the results up from 525p to 543p. Stock continued to climb during Wednesday reaching 565p as a sale of the groupÂ’s Technicolor business. The Daily Telegraph notes that whilst Carlton shares have suffered from its failure to secure the merger with UNM and fears of a downturn in ITV advertising, there has been something of a turnaround recently. Analysts now believe that ITVÂ’s revenue will not plummet and that advertisers will continue to pay for mass audiences. As a result CarltonÂ’s revenue should grown by a Â’respectableÂ’ 3-4% next year.
The paper is also pleased with plans to turn Carlton into major production force – as is Granada, also favoured by the paper for this reason. However, as losses are still high and digital investment is being counted as exceptional, it is difficult to put a value on the company says the
Telegraph. Nevertheless, Â’the worst is over,Â’ it says.
The Independent says that the health of the advertising market and ITVÂ’s performance as against Channel 4 and Channel 5 will be crucial to CarltonÂ’s shares. The paper says that although Carlton will soon become a pure media group (once Technicolor is sold), its shares still trade at a 40% discount to Granada Media. “That discount, coupled with Carlton’s ability to finance its digital ambitions, easily makes the shares a Â’buyÂ’.”
Daily Telegraph: Â’Worst is overÂ’
Independent: Buy
UBS Warburg: Buy
West LB Panmure: Buy
HSBC Securities: Add
SG Securities: Buy
Merrill Lynch: Accumulate
Morgan Stanley: Neutral, downgraded EPS from 362p to 355p
