Morgan Stanley assesses the weak advertising market is presenting challenges but is increasingly convinced the company has opportunities to create value. This should mean its shares outperform over the next 1-2 years.
The broker believes the Stan business – subscription video on demand – is fast-growing and now has the scale to cover fixed costs. The broker lifts the base case value for Stan.
Overweight. Target is $2.30. Industry view: Attractive.
Target price is $2.30.Current Price is $1.67. Difference: $0.63 – (brackets indicate current price is over target). If NEC meets the Morgan Stanley target it will return approximately 27% (excluding dividends, fees and charges – negative figures indicate an expected loss).