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Because the begin of the yr, ITV (LSE: ITV) has outperformed the FTSE 250 index handily. Whereas the index has moved up 5%, the ITV share worth is 12% increased than it was at first of 2025.
That leaves it on a price-to-earnings (P/E) ratio of 9. That appears doubtlessly low-cost, regardless of ITV’s unstable monetary efficiency lately.
May the share worth transfer increased from right here? I believe it probably might — and see ITV as a share for traders to contemplate.
Engaging dividend
For starters, there’s the payout.
The corporate goals to keep up the dividend per share at its present degree at the least – and maybe develop it.
That isn’t assured — no dividend ever is. Nonetheless, as administration has repeatedly dedicated itself to this goal, I believe it would attempt arduous to ship on it.
In the meanwhile, the ITV dividend yield is 6.1%. I see that as engaging and one purpose for traders to contemplate the share. Nonetheless, a horny dividend doesn’t reply the query of whether or not the ITV share worth is simply too excessive, too low, or about proper.
A modified working setting
At its present share worth, I believe ITV provides traders doubtlessly good worth.
Nonetheless, we have now seen prior to now that the corporate’s earnings might be unstable. The proliferation of digital broadcasting platforms has been each a menace and a possibility for the corporate.
The explanations for it being a menace are apparent. Gone are the times when ITV and a few rivals had a digital monopoly on tv broadcasting within the UK, with hundreds of thousands sitting down to observe no matter it determined to air.
A much more fragmented viewers has meant far fewer viewers for legacy media. In ITV’s case, that signifies that the traditionally profitable promoting market has turn out to be more difficult.
Advertisers have a a lot wider vary of choices as to the place to spend their cash, whereas falling viewer numbers make it tougher for the corporate to justify making the form of dear exhibits that would appeal to premium promoting charges.
Increased earnings potential
However ITV has not stood nonetheless. It has pushed aggressively into the digital world itself and that is now a key plank of its company technique. It expects digital revenues subsequent yr to be no less than £750m.
It additionally operates a sizeable studios enterprise, providing filming area and manufacturing help to 3rd events. That has enabled it to learn from the big variety of different corporations that need to make content material.
If issues go properly, I believe ITV might develop its earnings in years to come back.
Lengthy-term survivor
Alongside the way in which, it has to cope with challenges past digital development.
One is a weak financial system. That may scale back promoting spend, threatening revenues and income for the corporate.
This, nevertheless, is the place I believe its strengths come into play.
ITV has many many years of expertise navigating a cyclical promoting market, in addition to adapting to altering viewer preferences. If it may well maintain doing that I consider this long-established broadcaster can proceed to be very worthwhile.
