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JP Morgan warns of European media sector downturn

Bank is cutting its media sector EPS forecast by 15 per cent in 2020

JP Morgan is forecasting the European media sector as a whole to see a downturn due to coronavirus.

In a note to analysts and investors the bank said it is cutting its media sector earnings by share (EPS) forecast by 15 per cent in 2020, and 8 per cent in 2021.

“Broadcasters, Outdoor and Agencies see 2020 cuts of 25-35 per cent,” said the note. “While internet, publishing and entertainment are more resilient.”

However, Alex DeGroote, independent media analyst and senior advisor to Trillium Partners, tells¬†TVBEurope¬†he believes the forecast is not hard enough. “I think 2020 is going to be a very bad year for profit performance across the sector,” he says. “The drop in advertising across the sector will be a savage blow, but hopefully it will be short term.

“TV will probably be worst hit because it has such a large advertising component.”

“Another area of concern is the cancellation or postponement of trade shows,” adds DeGroote. “For those that have postponed to later in the year, will there be enough venues of the size required available? And, will people be allowed to travel in the way they were just six months ago?”