Citi is lowering the company’s share of advertising revenue to 40% for the second half. The broker expects this share to be maintained into FY16 and then rising to 41% because of Olympic Games coverage.
As free-to-air faces growing structural pressures the broker is downgrading revenue and earnings estimates. The stock is considered fair value at current levels, given the lack of earnings growth and balance sheet pressures.
A Neutral rating is retained. Target is reduced to $1.41 from $1.50.
Target price is $1.41.Current Price is $1.34. Difference: $0.08 – (brackets indicate current price is over target). If SWM meets the Citi target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).