Kepler Cheuvreux has revised its rating on ProSiebenSat.1 Media SE (ETR:PSM) (OTC:PBSFY), moving from Reduce to Hold and sustaining a price target of EUR 5.00. The share price currently stands at $1.36, representing a 33% decline over the past six months and lingering close to the 52-week low of $1.22.
The upgrade emerges in the context of continued underperformance observed in ProSiebenSat.1's stock following the closure of the MFE bid window. Analysts from Kepler Cheuvreux indicate that the current market price is aligning more closely with their fundamental valuation of the company. Analysis from InvestingPro corroborates a slight undervaluation of the stock based on its Fair Value assessment.
Conor O’Shea, an analyst at Kepler Cheuvreux, expressed reservations about the prospect of additional synergies achievable by the firm, particularly citing years of cost-cutting initiatives led by former CEO Bert Habets. Furthermore, questions have been raised over the effectiveness of ProSiebenSat.1's cross-border Free Television Advertising (FTA) model, especially as a competitor, RTL, appears to be moving away from this strategy.
Despite these reservations, the narrowing of the price-to-fundamental value gap prompted the rating revision to Hold. Investors are advised to continue monitoring operational developments and market dynamics affecting ProSiebenSat.1's valuation and performance.