SKY NETWORK TELEVISION LIMITED (SKT)
Share Price Analysis and Chart

22/08/2024

1

Outperform

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Despite a 2H slowdown, SKY Network Television delivered a FY24 result in line with Macquarie's forecasts. However, FY25 EBITDA guidance of between NZ$150-NZ$170m missed forecasts by the broker and consensus by -10% and -4%, respectively.

More positively, the dividend outlook (which is key, according to the analyst) was strongly reaffirmed.

The broker's Outperform rating is retained in the belief the company is one of the most undervalued stocks on the New Zealand market.

The NZ$3.32 target is also unchanged after Macquarie's valuation discount was lowered to -20% from -30% to reflect improving execution risk for management's three-year strategic plan.

FORECAST
Macquarie forecasts a full year FY25 dividend of 20.27 cents and EPS of 32.47 cents.
Macquarie forecasts a full year FY26 dividend of 27.52 cents and EPS of 41.92 cents.

26/08/2024

2

Overweight

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SKY Network Television reported an in-line FY24 result with earnings broadly flat on FY23. The much sought after stabilisation of core pay-TV subs remains an issue, Jarden notes, given a step-up in losses in FY24.

SKY has downgraded its revenue target and the broker stays on the cautious side following a disappointing -6.9% decline in premium Sky Box customer numbers in FY24. Sky Box customer numbers continue to struggle to find a base.

Jarden's medium-term forecasts are largely unchanged but the broker maintains a subdued outlook for earnings longer term, with forecast programming costs sitting above SKY's targets and earnings margins below despite the nearer term win likely coming on rugby rights renewal.

Overweight retained, target rises to NZ$3.09 from NZ$3.03.

FORECAST
Jarden forecasts a full year FY25 dividend of 19.26 cents and EPS of 30.73 cents.
Jarden forecasts a full year FY26 dividend of 27.52 cents and EPS of 35.50 cents.