Broker snap: JP Morgan still cautious on ITV
ITV's difficulties over the past year may not be over yet, JP Morgan said as it cut the TV station operator's share price to 74p from 96p.
In a note with the title 'It's worth waiting a little bit more' the broker noted that ITV, on which it keeps its 'neutral' rating, has seen its share price fall 20% so far in 2008 and 44% over the past 12 months.
Among the reasons it cited for its caution on ITV was the uncertain and deteriorating economic and advertising UK outlook, with the retail sector's advertising expenditure at risk in the second half of 2008.
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It also noted that ITV is trading at a price/earnings ratio premium of 33% for 2008 and 27% for 2009 to its peers.
However, it added that it saw two conditions for changing its recommendation to 'buy'; the UK economy stabilises and ITV's earnings outlook improves or ITV's share price falls, bring its price earnings ratio into line with peers.
