Analysts bullish on ITV

Analysts are forecasting large uptick in UK free-to-air broadcaster ITV’s profits, boosted by the advertising market recovery. Following sharp year-on-year increases in ad revenue at ITV, Morgan Stanley has upped its 2010 EBITA profit forecast for the broadcaster by 12%, taking the total to £287m (€332m). It expects 2011 EBITA to increase a further 7% to £392m.

The investment bank noted: “ITV has taken ad share in the recession, viewing hours continue to rise and ITV is substantially outperforming its free-to-air peers.” The broadcaster is likely to benefit from regulatory change with the likely abolition of the contract rights renewal mechanism, which governs what ITV can charge for advertising, providing a further boost to the bottom line.