Over the past month, the ITV share price (LON: ITV) (ITV.L) has outperformed the FTSE 250 index (INDEXFTSE: MCX). It has risen by 7%, while the index is currently up by 2%.
However, over the past 12 months it is a case of ‘role reversal’. The media company has underperformed the wider index in that time period. It is down 2% at the time of writing at 115p, while the FTSE 250 is up 7%.
Looking ahead, consensus analyst forecasts expect a rise in the company’s earnings per share of 16% in the current year. This would mean that ITV delivers earnings per share of 10.7p in 2021. Next year, analysts expect that the firm will deliver further double-digit earnings growth. They expect its profit to rise by 14% so that it has an earnings per share figure of 12p.
With the ITV share price currently trading at 115p, this gives the stock a forward price-earnings ratio of 10.7 using analyst forecasts for the 2021 financial year. Using next year’s forecasts gives a forward price-earnings ratio of 9.6.
Latest ITV share price news
The latest investor news concerning the ITV share price was a third quarter trading update released on 12 November. It highlighted the difficult operating conditions experienced by the business while lockdown measures have been in place. For example, external revenue declined by 16%, while ITV Studios revenue moved 19% lower.
In the trading update, the company detailed its attempts to adapt to the present difficulties. For instance, its production teams sought to innovate so that they were able to deliver or put back into production 85% of programmes that had been disrupted by Covid-19 containment measures. Further, the firm stated that it is on track to deliver on the £60 million of cost savings it is aiming for in 2020. Of these, around £10 million are expected to be permanent.
ITV stated in its third quarter update that it is making progress in rolling out its Planet V advertising platform. It also reported a good performance from its BritBox UK streaming service, as well as from its digital operations. It intends to continue personalising and developing the ITV Hub service to further appeal to a broad range of customers.
The firm is due to release its full year results on 9 March 2021. In its third quarter update it stated that it was expecting total advertising revenue to be up slightly year on year in the final quarter of the year. This was after a 6% rise was recorded in November 2020. However, this assumed lockdown measures in England would end in early December 2020, which has not been the case.
ITV did warn that Covid-19 containment measures would continue to impact its operations in the fourth quarter, with them up against a strong comparator from 2019.
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.