Lets recap a small bit of history in an effort to figure out why SWM is set to deliver multi-bagger returns during the next 18 months from the current market price of 20.5 cents a share.
UBS in 2022 had a price target of 95 cents per share for SWM . SWM during this year also reached a brief intraday high of 80 cents on 10th February 2022.
Broker news (*********) published the followingnote on SWM
https://www.*********.com.au/2022/03/22/swm-ubs-rates-the-stock-as-buy-3/
SWM – UBS rates the stock as Buy
–By Broker News | More Articles by Broker News
Continuing momentum in the ad market could offer 15% upside to UBS’s $315m base earnings forecast for Seven West Media. The media company grew year-on-year earnings 30% in the first half, with two-thirds attributed to free-to-air ad revenue strength.
The free-to-air and broadcaster-video-on-demand ad markets grew a combined 17% in the first half, up 14% on pre-covid levels. Following a strong second half start, UBS expects 5% growth in free-to-air and more than 50% growth in broadcaster-video-on-demand.
Earnings per share forecasts are upgraded 11% and 8% for FY22 and FY23.
The Buy rating and $0.95 target price are retained.
Sector: Media.
What then happened? Inflation continued to skyrocket and the RBA hiked interest rates 13 times to a 12 year high of 4.35% in an effort to tighten monetary conditions in order to lower inflation. Predictably the tv ad market was smashed as it underwent another ad market recession just as it had when the Covid-19 pandemic created massive economic dislocations and stopped advertisers from buying tv ads.
This falling tv ad market was quickly picked up by analysts during May 2022 and reflected in their lowered price targets. Since then the tight monetary conditions and ad market recession have continued.
What now happens? The ad market recovers , the below positive catalysts unfold and the share price over the next 18 months delivers multi-bagger returns from this extremely low base of 20.5 cents a share.
Some of the near term positive catalysts
- $40m Federal Government ad blitz which started after the recent Dunkley by-election on March 2 and will continue over two financial years.This $40m spend includes a substantial allocation to Total TV. People often forget that the federal government is one of the biggest advertising buyers in Australia and they drive substantial market improvement when they start to spend. The Morrison government spent a total of $128m in advertising in 2019-20 alone https://www.theguardian.com/australia-news/2020/dec/25/morrison-government-spent-128m-on-advertising-in-2019-20-figures-reveal
- Why is this $40m ad blitz important? After the Covid-19 pandemic the newly elected Albanese Government massively cut back advertising spend (take a look at ASX:A1N results in which they specifically call out the lack of government ad spend). This new $40m spend however shows that this trend is now reversing and the Federal government ad spend is already showing signs of lifting the overall ad market. https://www.skynews.com.au/australia-news/politics/government-invests-40-million-into-marketing-blitz-to-sell-stage-3-tax-cut-changes/video/3ad8cb2e14b42d28213697c8441177d7
Producer offset tax change starting on 1st July 2024 which generates approx$10m+ of annual recurring tax savings for Home and Away https://www.adnews.com.au/news/seven-welcomes-producer-offset-tax-change
- Federal Election to be held before May 2025. Campaign advertising at the May 2022 Federal Election was at a record high of $56m and was up 70% on the last federal election) A significant chunk of this advertising spend goes to Total TV (BVOD and Linear) https://www.adnews.com.au/news/election-2022-nielsen-calculates-ad-spend-up-70
- End of $40m Code7+(Phoenix investment) and the start of its $26m per year investment payback from the end of CY24 https://www.adnews.com.au/news/media-agencies-on-seven-s-polished-massive-upfront
- Last of Onerous Contracts by 1st July 2024 saving approx. $40m per annum https://www.sportbusiness.com/news/seven-hails-end-of-onerous-contracts-as-content-costs-fall-details-super-bowl-audience/ Currently SWM incurs approx. $40m in Onerous Contract provisions per year due to the existing Cricket Australia broadcast deal which ends by the middle of this year.
(Continued...)
- Forums
- ASX - By Stock
- SWM
- Why SWM is worth more than $1.50 per share
Why SWM is worth more than $1.50 per share, page-132
-
-
- There are more pages in this discussion • 206 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add SWM (ASX) to my watchlist
(20min delay)
|
|||||
Last
17.5¢ |
Change
0.000(0.00%) |
Mkt cap ! $269.3M |
Open | High | Low | Value | Volume |
17.5¢ | 17.5¢ | 17.0¢ | $24.15K | 138.4K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
7 | 555517 | 17.0¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
17.5¢ | 382503 | 7 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
7 | 555517 | 0.170 |
8 | 1157964 | 0.165 |
8 | 387268 | 0.160 |
4 | 300093 | 0.155 |
21 | 467084 | 0.150 |
Price($) | Vol. | No. |
---|---|---|
0.175 | 382503 | 7 |
0.180 | 549367 | 12 |
0.185 | 575404 | 8 |
0.190 | 434000 | 5 |
0.195 | 94804 | 4 |
Last trade - 16.10pm 17/09/2024 (20 minute delay) ? |
Featured News
SWM (ASX) Chart |