MTG (Hold, TP: SEK125.00) - No rush
We have adjusted our forecast for the NENT spin-off and left our underlying MTG forecast fairly intact. We expect stable Q1 adj. EBITDA YOY, in line with the guidance, awaiting an earnings uplift in H2 2019e. We find the long-term growth story in Esport appealing but view the stock price as fair given 2019e earnings largely tilted to H2 and FCF break-even not expected until 2020e. We have cut our recommendation to HOLD (BUY) with a new SEK125 (SEK365) target price largely reflecting the spin-off.Modern Times Group MTG AB is an entertainment group with operations that include free-television (TV), pay-TV, digital entertainment, radio and content production businesses. Co. has six business segments. Five of these segments, Free-TV Scandinavia, Pay-TV Nordic, Free-TV Emerging Markets, Pay-TV Emerging Markets and CTC Media, comprise Viasat Broadcasting. Co.'s Viasat Broadcasting is a free-TV and pay-TV operator, and also an operator and distributor of live and on-demand streamed free and paid video content over the internet, providing movies, live sports events, TV series, and catch-up services. The sixth business segment mainly comprises Co.'s MTG Studios, MTGx and Radio businesses.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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