​​​​ITV share price and full-year earnings results preview amid advertising slump

​​​When are ITV’s results expected?

​ITV, the British media company that holds 13 of the 15 regional television licences in the UK and is the country’s oldest and largest terrestrial television network, is expected to post its full-year results on 7 March 2024. The full-year results will be for the financial year ending in December 2023.

​What is ‘The Street’s’ expectation for the FY results?

​‘The Street’ expectations for the upcoming results are as follows:

​Revenue of £3,617 billion : -2.98% year-on-year (YoY)

​Earnings per share (EPS) : 8.10 pence : -38.7% (YoY)

​ITV in the doldrums amid advertising slump

​ITV, the UK's largest commercial broadcaster, is set to report its full-year earnings results on Thursday, March 7th.

​While total profits are forecasted to decline nearly 50% amidst a broader advertising slump, ITV's investments into streaming and studio production are expected to show robust growth.

​Analysts predict ITV will report a pre-tax profit of £363 million for 2023, down 46% from £672 million the previous year. This sharp drop is primarily attributed to an 8% fall in advertising revenue, as major advertisers cut spending in response to economic uncertainty and consumers' reduced discretionary income.

​ITV CEO Carolyn McCall has labelled 2023 the "worst advertising recession" since the global financial crisis. Household names like Amazon, Tesco, and Unilever have slashed their ad budgets, heavily impacting ITV's core broadcast business. However, McCall asserts this is a temporary blip, with advertising projected to stabilize in 2024.

​ITV's investments into its new streaming service ITVX are also contributing to the profit squeeze. McCall has stated that 2023 was a "peak" year for spending on the platform. ITVX, which launched in December 2022, aims to help offset falling viewership of ITV's traditional broadcast channels. The service offers free content supported by advertising, as well as an ad-free subscription option.

​Last week ITV sold its 50% stake in BritBox International to BBC Studios for £255 million. The streaming service, a joint venture between ITV and the BBC, offers British programming to viewers outside the UK. By exiting the joint venture, ITV can focus its streaming investments solely on ITVX and its goal to better compete with the likes of Netflix and Amazon Prime.

​The sale of BritBox International provided a boost to ITV's share price last week, with shares jumping around 14% on the news. ITV expects £235 million in net proceeds from the deal after taxes and other costs. The company stated these funds will go towards share buybacks starting "imminently", in theory providing further support for its stock price. In reality by Monday afternoon ITV’s share price had already given back half of the previous week’s gains.

​Despite the significant profit decline, ITV remains committed to its original content. Flagship shows like Love Island and drama series Trigger Point will continue receiving investment. ITV Studios, the production arm behind these hits, also saw revenues increase last year.

​As the advertising market recovers in 2024, analysts expect ITV's profits to rebound. Consensus forecasts show earnings rising back to over £600 million next year. But the broadcaster faces an uphill climb this year. Cost-cutting efforts are underway, as ITV braces for the full impact of economic uncertainty on its advertisers.

​The performance of ITVX by the end of 2023 will be crucial for the long-term health of ITV's business. McCall and the management team are essentially making a bet that they can transition ITV into a digital-first media company, less reliant on traditional television advertising. If ITVX did as expected in 2023, it may spell a brighter future. But execution risks remain for ITV's new streaming ambitions.

​How to trade ITV into the results

​LSEG (formerly Refinitiv) data shows a consensus analyst rating of ‘hold’ for ITV – 2 strong buy, 3 buy, 5 hold and 2 sell - with the median of estimates suggesting a long-term price target of 82.00 pence for the share, roughly 36% higher than the current price (as of 4 March 2024).

​ITV – technical view

​ITV’s share price has greatly underperformed the FTSE 250 by falling over 30% in the past year versus the index’s 4% drop. It continues to bobble along its 2011 to 2024 lows which were all made in the 55.50p to 50.28p region.

​ITV Monthly Chart

​The fact that the ITV share price didn’t manage to rise above its 200-day simple moving average (SMA) at 65.83p last week and that it has already given back half of last week’s gains doesn’t bode well for bullish investors.

​ITV Daily Chart

​The breached September-to-March downtrend line at 59.08p may, because of inverse polarity, act as a support line. If, however, it doesn’t stem this week’s fall, the major 55.50p to 50.28p support zone would be back in sight.

​For the bullish reversal to gain traction, a rise and daily chart close above the 66.16p December high would need to happen. Only then could an advance towards the August to September highs at 74.96p to 75.92p be envisaged.