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ITV share price: what are analysts forecasting for the firm’s future?

Are analysts upbeat or downbeat about the outlook for ITV (LON: ITV) (ITV.L) and its share price?

The ITV share price (LON: ITV) has surged higher since the start of the year. It is currently trading 16% up on its price from the start of 2021, which is a stronger performance than that delivered by the FTSE 250 index (INDEXFTSE: MCX). It is up 4% year-to-date. In the past 12 months, ITV shares have gained 106% versus a 62% rise for the FTSE 250 index.

Looking ahead, the consensus analyst forecast is for a 1% decline in the company’s earnings per share in the current year. Analysts expect the company to deliver earnings per share of 10.7p this year. They anticipate that this will be followed by a 15% rise in net profit on a per share basis in the next financial year. This means that the company is due to have earnings per share of 12.4p in 2022, according to the analyst consensus.

Using these analyst forecasts and ITV’s current share price, the stock trades on a forward price-earnings ratio of 11.6 for the 2021 financial year. It has a prospective price-earnings ratio of 10 using 2022’s consensus analyst forecast.

Latest ITV share price news

The latest investor news released by the company was on 9 March 2021. It reported a 16% decline in total external revenue for the 2020 financial year. According to the company, this was largely a result of Covid-19 restrictions that disrupted its capacity to film new shows and also hurt demand for TV advertising.

Indeed, ITV Studios revenue fell by 25%, while advertising revenues moved 11% lower versus the previous year. The caused a 22% decline in earnings per share compared to 2019 levels.

The firm reported that over 90% of its programmes are now back in production. It plans to internationalise its formats and grow its scripted business in future. It has also sought to mitigate the impact of falling revenues by reducing costs. In the 2020 financial year it slashed £116 million from costs, which was almost double its target of £60 million. It now expects to deliver £100 million of annualised permanent overhead cost savings by 2022.

Future outlook

ITV expects recent improvements in advertising trends to continue as lockdown measures abate. For example, it expects total advertising revenue to increase by 8% in March, with a further increase of 60%+ in April. The firm also reiterated its strategy to invest in digital growth, while its BritBox streaming service is set to be launched in further territories over the coming months and years.

The firm’s next investor update is due to take place on 5 May 2021, when its first quarter trading statement is slated for release. At the time of writing the ITV share price is trading at 124p.

Not Investment Advice Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.