MEDIASET ESPAÑA / ATRESMEDIA: HIGH UNCERTAINTY, KNOCK-DOWN PRICES - OPPORTUNITY AWAITS (ANÁLISIS BANCO SABADELL)
We raise our Target Prices. We maintain our recommendation on TL5 and change that on A3M to BUY.After the two stocks’ poor performance in 2020 (TL5 has fallen by -47.1% and A3M by -35.6% in absolute terms) and since 2019 (TL5 has dropped by -50.2% and A3M by 58.1% in absolute terms and -24% and -32% vs. IBEX, respectively), their current trading multiples are attractive and stand far below their historical average and their peers. We raise our valuations: (i) TL5 new T.P. € 4.70/sh. (+23.7% vs. previous, +60% upside), and (ii) A3M new T.P. € 3.00/sh. (+11.1% vs. previous and +37% upside). We are aware of the current scenario of volatility, with a sharply deteriorating advertising market, the uncertainties linked to Covid-19 and structural risks, but we believe that this scenario would already be priced in at the current trading levels. We highlight the two companies’ strong cash generation capacity (FCF yield’21 of >17% both).
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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