ITV is the largest and oldest commercial TV network in the UK. This British television network is based in London and broadcasts to England, Wales, Southern Scotland, Northern Ireland, the Isle of Man and the Channel Islands. The network is comprised of 15 regional television licenses and holds 13 of them.
History of ITV
Before 1954, the BBC Television service held industry monopoly in Britain. ITV emerged when the Television Act 1954 passed. The Independent Television Authority (ITA), a product of the act, had two major functions: to regulate the television industry and award franchises.
London's ‘Associated-Rediffusion’ was the first network in ITV history, launched in September 1955. Throughout the years, the network has faced several modifications through franchise reviews. Broadcast regions and service operators have changed, and while some weekend franchises were removed, other services were added.
The nature of ITV changed with the passing of the Broadcasting Act in 1990. The Independent Television Commission (ITC) replaced the Independent Broadcasting Authority (IBA) as a regulator. This meant that companies could buy into ITV. The ITC awarded franchises to the highest bidder.
Unfortunately, this came without any safety precautions and led to operators paying different amounts to the treasury.
Yorkshire Television, on the other hand, which held a region of the same size, faced heavy competition and paid £37.7 million.
In 2004, Carlton Communications and Granada plc merged to create the current form of ITV. By 2012, the company had increased its audience share, upgraded its rank from BB- to BB+ and reduced its debt from 730 million in 2008 to net cash of 16 million at the start of 2012.
Today, ITV creates, distributes and produces content for several platforms all over the world. The company operates through Online and Broadcast, plus ITV Studio segments. The Online and Broadcast segment airs a variety of programs on its free-to-air channels which include ITV, ITV2, ITV3, ITV4, ITV Breakfast, ITV Encore, ITV Be, CITV and CITV Breakfast. It also provides TV advertising services.
ITV Share Price History
The ITV share price history indicates that throughout the years, the stock has experienced highs and lows with several price fluctuations. Between 2004 and mid-2007, the average share price was 110.00 GBX with a stable performance as shown on the ITV stock historical chart. Trouble started right before the recession, with shares losing value in August 2007. This downward spiral led to its lowest price in ITV share price history at 19.00 GBX in February 2009.
The stock began to gain upward traction in April 2009 and remained on the uptrend for the next six years – except for a few temporary fluctuations. The stock performed well and in July 2015, traded at an unprecedented high of 280.70 GBX. In December 2015, it took a change for the worse and has been on the decline since then. As of October 9th 2019, the historical price data for ITV stock showed that the shares traded at 122.50 GBX.
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Brexit and the ITV Share Price
ITV took a big hit in its share price since the Brexit vote. Why the big drop? One word: Advertising. After the financial crisis of 2008, investors are worried about a similar scenario in the form of a ‘Brexit recession’. When a downturn like that hits, marketing budgets are cut first.
In a bid to safeguard ITV’s entire revenue from an ad downturn, ITV management has made efforts to diversify the business. This includes purchasing TV production companies not only in the UK, but Europe and the US too. However, ITV relies heavily on TV advertising income. So, will diversification make a substantial impact?
Additional Brexit factors that could strike ITV include obstacles to co-productions in popular TV dramas, hindrances for the international TV sales department and impediments in European operations.
ITV Stock Price Prediction
At the moment, ITV's stock seems rather promising, with a rise in 20% since August 2019. However, there are still elements that could affect investors’ decisions. The economic and political unpredictability in the UK has affected several British companies. The external revenue of ITV dropped by 7% between January and July of 2019.
According to Market Beat, fifteen Wall Street investment analysts polled in a consensus forecast, have issued price targets and ratings for ITV in the past year. Their median 12-month price target is 141 GBX. The highest estimate being 170 GBX and the lowest 121 GBX. Currently, there are 9 ‘hold’ ratings, 2 ‘sell’ ratings and 4 ‘buy’ ratings and zero ‘strong buy’ ratings. The consensus rating is ‘hold’ and the consensus rating score is 2.13.
However, not all analysts are as optimistic. Read more about the ITV share price forecast.
Should You Buy Or Not?
Potential investors should keep in mind that the current economic and political instability in the UK will continue to affect the ITV share historical prices. Although the future of ITV is not solely based on its current share price, future investors should consider other fundamental factors like the company’s balance sheet.
Despite all the uncertainty, the company is pressing on with building a stronger and more diversified business. The current CEO Carolyn McCall aims to make ITV ‘more than just TV’ by looking into new direct to consumer avenues and strengthening the production side of the business. In fact, the company will soon launch BritBox – a possibly lucrative new streaming service.
As it evolves into a more digital entertainment company, ITV is in a good position to offer attractive returns and maintain sustainable growth in the long term. In addition, it is committed to paying out the annual dividend of 8 GBX per share.
That said, investors should look at all factors and form their own opinions as share prices may rise and fall in the blink of an eye.
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