ITV PLC             

ITV PLC (LON: ITV) is an FTSE 100 index listed IPB (integrated producer broadcaster) company. The Company's operations are differentiated in two segments: Broadcast & Online and ITV Studios.

ITV will pay a final dividend of 3.3 pence per share on 26 May 2022, while the ex-dividend will be 14 April 2022.

Investment Rationale – Watch at GBX 74.76

• Correction in Stock Price: The stock price witnessed a significant correction despite record FY21 revenues, primarily due to the fears that the group has reached a ceiling amid digital transformation.
• Macroeconomic Risk: The Russian invasion in Ukraine has already jolted the market, while the slow retail growth and battered consumer spending in the UK amid rising fuel costs can keep the equity market under pressure.
• High Leverage: The Company’s debt to equity ratio of 0.75x remained more than the industry median of 0.43x during FY21.
• Bearish Technical Indicators: From a technical viewpoint, the stock is trading below its 20-days exponential moving average of GBX 107.27, indicating a bearish momentum. Moreover, the MACD line has given a bearish crossover against the signal line.
  

One Year Share Price Chart

 (Data Source: Refinitiv, Analysis by Kalkine Group) 

Conclusion

Based on the geopolitical tensions, recent stock price correction, and bearish technical indicators, we have given a “WATCH” recommendation on ITV PLC at the current market price of GBX 74.76 (as of 4 March 2022 at 12:46 PM GMT).

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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