3 SUNTV share price target reports by brokerages below. See what is analyst's view on SUNTV share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
One of the key advantages of broadcasters has been stronger balance sheets, which is a paramount factor under current situation. The stock prices have also corrected sharply across the board. We now upgrade Sun TV to BUY, valuing it at 10x FY22 EPS at | 410/share. We also maintain BUY rating on TV Today with a revised target price of | 250/share (8x FY22 EPS). We downgrade Zee to HOLD with a revised target price of | 150/share (8x FY22 EPS). Lower multiple and downgrade for Zee is on account of continued pressure on receivables, related party dues and now decision of investment of | 522 crore over time in its subsidiary, Margo Networks (SugarBox) on which we still await clarity. Negative news flows on promoter group also remain an overhang.
We have cut TP to INR525 (v/s INR600 earlier) based on the cut in estimates, valuing it at 13x P/E on FY21E EPS of INR40. The stock is priced at 12x on FY21E, however, given the weak earnings outlook, revival in earnings would be the key. Maintain Buy.
Sun’s Ad business is going through a challenging period currently, with growth slowing down significantly. The company is slowly and steadily gaining viewership market share in its flagship channels. Ad revenues are expected to recover FY 21E onwards, while subscription revenues will continue with its strong run over the next couple of years at least. Foray into the digital side will add another new stream of revenues while profitability contribution from this business will take some more time. Margins will move up again from FY 21E onwards on higher contribution from subscription business and operating leverage. New movie launch/es and success at IPL will act as an additional upside to margins. We cut down our FY20E and 21E estimates on weak Ad growth environment and at the same time roll over to FY 22E estimates. Post the recent fall in the stock price, at current valuations the stock looks very attractive to us at 9.3x FY22E earnings, while providing us comfort with robust FCF and return ratios. Maintain BUY.
NTO disruption impacts performance. Valuation & Outlook: While the NTO impact is transitory, the key concern for Sun TV has been the market share weakness in its erstwhile strong Tamil segment where its leadership gap is much lower now. The silver lining, on the other hand, is TN digitisation potential and focus on OTT segment. However, we would turn constructive only when we witness improvement in marquee Tamil segment. We maintain HOLD rating with TP of | 580/share (15x FY21 EPS).
Robust quarter; margins to reel under pressure. Valuation view: We roll forward our valuation to FY21E, valuing SUNTV at a TP of INR720 (prior: INR750), ascribing 15x (~30% discount to three-year average due to mounting pressure on viewership share and increasing investments across both traditional and digital medium) P/E to FY21E EPS. However, the stock has corrected by ~15% over the last three months, and thus, appears attractively valued at 12.4x/11.0x FY20/21E EPS. This, along with healthy return ratios, offers comfort. Maintain Buy.
Reducing price target to reflect impact of digital and OTT; retain BUY. Our new TP implies 22% upside potential from the CMP. At INR 641, Sun stock trades a 1- year forward P/E of 15.4x compared to trailing six-year average of 19.5x. Our 780 DCF value for Dec-19 also implies the same 15.4x forward P/E multiple. Furthermore, Sun shares are trading at FY19E FCFF yield of 5.7% and FY20E yield of 7.2%. Initial losses from launch of new GECs (Bangla, Marathi, second Telugu) and repositioning of Sun Life (Tamil) may shaveoff 6-7% (INR 2.5-3.0 per share) from our FY20 EPS forecast, but need not dilute DCF value significantly, given the potential for higher ad growth in future.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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