0R15 9263.0 5.0108% 0R1E 8452.1602 1.1266% 0M69 17150.1406 36.2203% 0R2V 172.4 -2.4335% 0QYR 1461.5286 -0.4069% 0QYP 428.0701 1.1986% 0LCV 139.42 -2.0239% 0RUK 2966.5117 1.5233% 0RYA 1810.0 2.1445% 0RIH 148.0 0.339% 0RIH 148.44 0.6373% 0R1O 177.75 10071.6738% 0R1O None None% 0QFP 9346.083 85.4382% 0M2Z 284.6256 0.0529% 0VSO 25.39 -28.6898% 0R1I None None% 0QZI 511.0 2.8169% 0QZ0 220.0 0.0% 0NZF 839.5385 68.4467%
ITV Plc
ITV Plc (LON: ITV) is an FTSE 250 index listed media company founded in 1955. It operates as an integrated producer broadcaster that offers content with multiple platforms at a global level. It has two segments: Broadcast & Online and ITV Studios.
On 28 July 2021, the Company would release its H1 FY2021 interim results.
Investment Rationale for Valuation – SELL at GBX 131.32
Key Risks
Q1 FY2021 Trading Update (released on 5 May 2021)
(Source: LSE Website)
One Year Share Price Chart
(Analysis done by Kalkine Group)
Valuation Methodology: Price/Book Value Approach (NTM) (Illustrative)
Conclusion
While there is uncertainty, there is also continuous improvement in the macro-environment. The management has cautious optimism for FY2021 amid a challenging business environment. However, ITV’s end markets still remain impacted by the Covid-19 related restrictions, and the recovery pace in FY2021 is dependent on the easing of lockdown measures. Hence, it would be prudent to liquidate the position at a profit as the stock is also trading near its 52-week high, indicating overstretched valuation. Overall, we do not have significant catalysts to support an uptick in the stock price and recommend exiting the position currently. The stock made a 52-week low and high of GBX 54.16 and GBX 134.15, respectively.
Considering the macroeconomic uncertainty, lack of detailed guidance, higher leverage of the Company than the industry, and unfavourable valuation as done using the above method, we have given a “SELL” recommendation on ITV Plc at the current market price of GBX 131.32 (as of 15 June 2021 at 7:50 AM GMT), while we look forward to reinvesting based on how the Company’s operations come back on track.
MGC Pharmaceuticals Ltd
MGC Pharmaceuticals Ltd (LON: MXC) is an FTSE listed and Australia-based biopharma company. It develops and supplies phytocannabinoid derived medicines.
Investment Rationale – Avoid at GBX 2.64
Key Risks
Recent News
CannEpil in Primary Care Reimbursement: On 15 June 2021, MXC’s CannEpil has been added to the Primary Care Reimbursement Service in the Republic of Ireland.
Q3 FY2021 Update (released on 27 April 2021)
Financial Highlights (for six months ended 31 December 2020 (H1 FY2021), as of 26 February 2021)
(Source: LSE Website)
One Year Share Price Chart
(Analysis done by Kalkine Group)
Conclusion
In the current scenario, the UK medicinal cannabis industry is far from reaching its full potential due to legislation on hemp cultivation and processing. MXC became the first medicinal cannabis company to be listed on the LSE. MXC has significant research and development activities in this field and is making progress in its key clinical research programmes. However, the Company still has a loss-making operation and relies on external funds for continuous operations. The stock made a 52-week low and high of GBX 2.00 and GBX 9.30, respectively.
Based on its loss-making operations, poorer profitability and leverage position of the Company than the industry and lack of visibility, we have given an “AVOID” recommendation on MGC Pharmaceuticals Ltd at the current price of GBX 2.64 (as of 15 June 2021, at 12:20 PM GMT), while we look forward to taking a fresh position when we have future profitability.
*The reference data in this report has been partly sourced from REFINITIV.
*All forecasted figures and Peers/ Industry information have been taken from Refinitiv.
Disclaimer
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