Sunday 25 June 2017

UK research firm rates INM stock as a 'buy'

Peter Flanagan

Peter Flanagan

CITY research firm Liberum Capital has initiated Independent News and Media as a "buy" and put a target price more than 80pc above the current stock price.

Liberum has slapped a target price of €1.05 on the company's shares, pointing to a lowering of net debt and what it calls an excellent position in its core markets to capitalise on the recovery in the advertising sector.

"In the markets that INM operates in, newspaper advertising has been more resilient in protecting its share than the global picture.

"In Ireland, newspapers' share of the overall advertising market is the same as it was in 1999, at over 50pc; meanwhile South Africa, New Zealand and Australia have all seen less severe declines than the global picture suggests," the report states.

The report goes on to point out that the Irish Independent, has a 25pc share of the morning daily circulation total giving it "a very powerful position in the Irish advertising market".

"In Northern Ireland, the 'Belfast Telegraph' is the market leader in the NI-only newspaper space. Meanwhile, in New Zealand, the 'Herald' similarly dominates the daily newspaper space."

"We do not see leverage as a substantive threat to the company and forecast that the company should meet its target of two-and-a-half times net debt to EBITDA in the medium-term, with leverage continuing to decrease through organic cash generation."

INM closed down just over 2pc yesterday at 60c.

Irish Independent

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