Seven West Media will pay around $75m per annum to broadcast simulcast cricket test matches and Big Bash with Foxtel. UBS believes the combination of cricket and tennis in FY19 could act as a catalyst for the Seven network and reverse underlying share declines.
UBS expects modest earnings growth from TV will be offset by print declines in FY19, with EBIT of around $235m. The broker maintains a Neutral rating and reduces the target to $0.60 from $0.70.
Target price is $0.60.Current Price is $0.58. Difference: $0.02 – (brackets indicate current price is over target). If SWM meets the UBS target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).