Hold Zee Entertainment Enterprises, target Rs 410: ICICI Direct
Hold Zee Entertainment Enterprises at a price target of Rs 410.
ICICI Direct has a hold call on Zee Entertainment Enterprises with a target price of Rs 410.
The current market price of Zee Entertainment Enterprises is Rs 414.30.
Time period given by the brokerage is one year when Zee Entertainment Enterprises price can reach the defined target.
View of the brokerage: We highlight that Zee’s premium valuation has been driven by industry leading ad and subscription growth – a function of viewership market share expansion, which currently is clouded by NTO led disruption. We also believe that NTO implementation, apart from providing consumers a choice, has led to higher power in DPO’s hands in bundling channels. Zee’s absence in base bouquet could be detrimental. Consequent, to revenue estimates, we revise our FY20 earnings downwards by 10.7 per cent. Therefore, we downgrade the stock to HOLD. We introduce FY21 estimates and roll over our valuations, valuing it at 20x FY21E P/E (vs. 25x FY20E) to arrive at a target price of Rs 410.
The current market price of Zee Entertainment Enterprises is Rs 414.30.
Time period given by the brokerage is one year when Zee Entertainment Enterprises price can reach the defined target.
View of the brokerage: We highlight that Zee’s premium valuation has been driven by industry leading ad and subscription growth – a function of viewership market share expansion, which currently is clouded by NTO led disruption. We also believe that NTO implementation, apart from providing consumers a choice, has led to higher power in DPO’s hands in bundling channels. Zee’s absence in base bouquet could be detrimental. Consequent, to revenue estimates, we revise our FY20 earnings downwards by 10.7 per cent. Therefore, we downgrade the stock to HOLD. We introduce FY21 estimates and roll over our valuations, valuing it at 20x FY21E P/E (vs. 25x FY20E) to arrive at a target price of Rs 410.
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