ATRESMEDIA/MEDIASET ESPAÑA: OUR STANCE REMAINS POSITIVE (ANÁLISIS BANCO SABADELL)
We raise our estimates and T.P., reiterating our BUY recommendation in both.We raise our estimates to include our more upbeat stance on the TV advertising market. Although 2021 is not following the trends seen in 4Q’20, we expect a better outlook starting in 2Q’21 (which provides an “easy” comparison), and we now forecast +8% in 2021 and a +2.6% CAGR’20-23e vs. +3% and -0.5% previously. Despite the good performance of both share prices since October’20 (+72% TL5 and +59% A3M in absolute terms and +46% and +33% vs. IBEX), we believe that the rerating may continue, as both companies are trading at very appealing ratios (~9x P/E’21e vs. ~17x historical average), generating significant cash (>10% FCF’21e yield). We raise our estimates and valuation for both companies: new T.P. for TL5 at € 7.00/sh. (+49% vs. previous T.P and +41% upside) and that of A3M at € 4.50/sh. (+50% vs. previous T.P. and +31% upside). We maintain our bet on TL5, as it has higher upside potential and greater capacity to cut costs (higher margin) and generate cash, making it a more defensive option.
Atresmedia Corporacion De Medios De Comunicacion is a television and radio broadcasting company based in Spain. Co. is engaged in the indirect management of television and radio services, which include the broadcasting, creation, production and distribution of television and radio programming, and the sale of advertising time. Group companies mainly carry on business activities relating to the production, copying and broadcasting of sounds and images, and TV and Internet home shopping. Co. provides National and World Digital Television Services. Co. is the parent company of Grupo Antena 3.
Gestevision Telecinco is a television network company based in Spain. Co. heads a group of dependent companies, which form the Telecinco Group. Through its subsidiaries, Co. is engaged in the management and commercial exploitation of a television network. Co.'s television network acquires, produces, and distributes audiovisual content. Co. also sells the network advertising airtime, carried out by its subsidiary. In addition, Co. is involved in the sale of other advertising products; production of news programs; the production and sale of audiovisual property rights; and teleshopping.
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