GTN’s result was below the broker’s forecast although the broker notes the core businesses are ticking along and revenue momentum continued to build. The focus is nevertheless on the US, where the broker sees two possible outcomes.
The preferred option is for US optionality to remain in play, the other option is for GTN to exit the US. The broker notes the probability of a CBS deal restructure is skewed to the upside, providing GTN with time to scale and up-skill the sales network.
Outperform retained, target falls to $3.20 from $3.60.
Target price is $3.20.Current Price is $1.82. Difference: $1.38 – (brackets indicate current price is over target). If GTN meets the Macquarie target it will return approximately 43% (excluding dividends, fees and charges – negative figures indicate an expected loss).