Continuing momentum in the ad market could offer 15% upside to UBS’s $315m base earnings forecast for Seven West Media. The media company grew year-on-year earnings 30% in the first half, with two-thirds attributed to free-to-air ad revenue strength.
The free-to-air and broadcaster-video-on-demand ad markets grew a combined 17% in the first half, up 14% on pre-covid levels. Following a strong second half start, UBS expects 5% growth in free-to-air and more than 50% growth in broadcaster-video-on-demand.
Earnings per share forecasts are upgraded 11% and 8% for FY22 and FY23.
The Buy rating and $0.95 target price are retained.
Sector: Media.
Target price is $0.95.Current Price is $0.63. Difference: $0.32 – (brackets indicate current price is over target). If SWM meets the UBS target it will return approximately 34% (excluding dividends, fees and charges – negative figures indicate an expected loss).
