Banijay Entertainment : Grow and consolidate faster

Banijay Entertainment benefits from good fundamentals and should outperform the content market thanks to the recurring nature of its main formats and its growing exposure to streamers. And it is developing new revenue streams (live events, IP monetisation on social media) that will support its organic top line (guidance of mid-to-high single digit growth through 2028) and FCF generation (back to c. € 100m p.a. in 2025-26 after WC and tax headwinds in 2024). M&A is one of the major risks and we believe that the company may consider a transformational acquisition (ITV Studios) on top of recurring bolt-on M&A deals. Nevertheless, a large acquisition could be funded in part with equity and rating agencies would likely recognize the operating merits of such a deal, so that a rating downgrade could be avoided. We affirmed our Neutral recommendation on the 2029 secured notes that offer limited upside/downside at current levels (ytm of 5.6%, Ytw of 2.8%).