MARKET REPORT: ITV shares out of favour

The City may have been tuned in to ITV for the closing day of the Cheltenham Festival, but its shares were out of favour. 

The broadcaster’s stock slipped 2.4 per cent, or 2.02p, to 83.82p as brokers at JPMorgan cut the firm’s target price from 192p to 170p. 

While they said ITV was still among their ‘key picks’ for the sector, analysts at the Wall Street bank slashed their forecasts by 4 per cent for spending on advertising – a vital source of revenue for the firm. 

‘Geopolitical tensions have amplified the risk that higher input prices, supply chain disruption and the higher cost of living will slow advertising momentum,’ said JP Morgan analyst Daniel Kerven in a note to clients. 

While ITV was the FTSE 100’s biggest faller, food delivery firm Ocado was on the rise as investors took a punt that Thursday’s selloff may have been a little overdone. Shares earlier this week tanked 8 per cent as the online supermarket warned that inflation would eat into its sales. Ocado partners with the up-market Marks & Spencer, and is worried shoppers will look for cheaper options. But investors were in search of a bargain yesterday, and began buying in. Shares climbed 7.6 per cent, or 84p, to 1189p. 

US tech stocks, which have taken a beating since the start of the year, were also tentatively back in favour. 

Many British savers tend to get exposure to the sector by buying into US-focused investment trusts, such as Scottish Mortgage, Edinburgh Worldwide and the Baillie Gifford US Growth Trust. 

Those titan funds were some of the biggest gainers on London’s stock market yesterday, as investors hoped the tech sell-off was largely over. Firms such as Netflix, Tesla and Facebook have all been largely shunned since the start of the year, with traders worrying that higher inflation and slower economic growth would affect their future earnings. 

But inflation is still on the rise, and savers are running out of options for where to store their money without it being eroded away. Scottish Mortgage climbed 2 per cent, or 19.5p, to 1004.5p, Edinburgh Worldwide was up 3.8 per cent, or 8p, to 220.5p and Baillie Gifford US Growth jumped 4.9 per cent, or 11p, to 237p. 

One of the UK’s own ‘tech’ firms – though some critics have argued it is more of a retail conglomerate – has had a torrid time since listing on the stock market in 2020. 

THG, or The Hut Group, listed at 500p per share, but it is now worth just 95.75p, even after climbing 4.6 per cent, or 4.2p, yesterday. 

One of the key concerns, when the firm floated, was corporate governance. Investors worried that there weren’t enough truly independent board directors to keep in check THG’s boss and founder Matt Moulding. THG repeatedly insisted it would hire more directors, and must have breathed a sigh of relief when it finally installed Tiffany Hall in 2021 to chair the remuneration committee. But Hall stepped down with immediate effect yesterday ‘for family reasons’. 

Damien Sanders, a former Deloitte partner who was brought onto the board in late 2020, will now temporarily head up the remuneration committee – leaving him with the unenviable job of leading discussions on the pay of Moulding and other executives. 

The FTSE100 edged up 0.3 per cent, or 19.39 points, to 7404.73 amid a relatively uneventful day on the markets. Its smaller sister, the FTSE250, was up 0.9 per cent, or 180.93 points, at 21,156.62.

One of the largest gainers on the mid-cap index was Bridgepoint, the private equity firm, which received a vote of confidence from analysts at Peel Hunt, who said Bridgepoint should aim for a share price of 380p. Shares edged up 9.8 per cent, or 27.5p, to 307.5p.