Narrative Update: STV Group Analyst Price Target Revision
Analysts have lowered their fair value estimate for STV Group from £1.94 to £1.63. They cited a revised outlook on revenue growth and a decrease in the discount rate applied to future earnings projections.
What's in the News
- STV Group's Board is not proposing an interim dividend for the period ending 30 June 2025, due to current uncertain trading conditions. The Board will continue to review the situation. (Key Developments)
- The company reiterated its earnings guidance and expects 2025 full-year revenue to be between £165 million and £180 million. (Key Developments)
- STV Group forecasts total advertising revenue to decline by 8% in the third quarter of 2025. July is expected to be down 20%, largely due to the previous year's men's Euros, while August and September are forecast to be broadly flat. (Key Developments)
- Total advertising revenue is projected to decrease by 10% for the first half of 2025. (Key Developments)
- The Audience division's revenue for Fiscal Year 2025 is anticipated to reach £90 to £95 million, with an adjusted operating margin between 13% and 15%. (Key Developments)
Valuation Changes
- Consensus Analyst Price Target: Lowered from £1.94 to £1.63, reflecting a decrease in fair value estimates.
- Discount Rate: Reduced from 9.10% to 8.00%, indicating a less aggressive rate applied to future earnings.
- Revenue Growth: Changed from an expected increase of 0.56% to a decline of 1.01%.
- Net Profit Margin: Improved slightly from 6.93% to 7.27%.
- Future P/E: Reduced from 8.76x to 7.12x, suggesting lower earnings growth expectations.
Disclaimer
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