Financial Trading Blog
Stock of the day 26/07/2016 – Sky PLC
Like its rival ITV Sky has struggled to gain any positive traction this year despite striking all-time highs back in 2015. Opening 2016 at £10.99 Sky had actually managed to hit £11.20 by the beginning of February after a very shaky January; however that peak was swiftly lost, with a sustained decline across the next 4 months leaving the stock hovering around £9 on the eve of the Brexit referendum results. The results themselves caused Sky to plunge to a 3 year low of £7.73, though the stock has since climbed back to a current trading price of £8.80 (IT-Finance.com, 26/07/2016) in the intervening month.
(Source: IT-Finance.com 26/07/2016)
Back in January Sky reported a £12 million fall in half year pre-tax profits to £525 million despite a 205k increase in UK and Ireland net subscribers in its second quarter, largely thanks to expenses arising from the takeover of Sky Italia and Sky Deutschland. In April the company then revealed its third quarter update, which lopped off around 10% in value in the week that followed after Sky posted a 0.6% rise in its churn rate to 10.7%. Across the 9 months to the end of March, however, Sky’s situation looked far better, with profits surging by 12% to £1.1 billion off of a 5% jump in revenue to £8.72 billion.
In terms of Sky’s full year figures on Thursday analysts are expecting the company to post a 13% rise in profits £1.35 billion off the back of a 6.7% jump in revenue to £12 billion. More importantly Sky is also expected to update investors on its plans to enter the mobile phone market, something that is meant to be happening this year.
Sky PLC has a consensus rating of ‘Hold’ with an average target price of £10.61.
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