Kepler Cheuvreux upgraded its outlook on ProSiebenSat.1 to 'hold' from 'reduce' as the broadcaster’s stock price stabilized near its fundamental worth amid persistent market challenges and structural headwinds in the German TV advertising market. The upgrade follows a period of underperformance linked to the change in ownership and management under MFE, which now holds a majority stake. Despite cautious forecasts and margin pressures, Kepler maintains steady sales and EBITDA projections while highlighting synergies and refinancing impacts.
Key Points
- Kepler Cheuvreux upgrades ProSiebenSat.1 rating to 'hold' following stock adjustment to fundamental value.
- ProSiebenSat.1 faces continued revenue and margin pressures due to a weak German TV advertising market and structural challenges.
- MFE majority ownership triggers leadership changes and targeted €200 million synergies but with uncertainty around full ownership timeline and delisting.
German media company ProSiebenSat.1, publicly traded on the Frankfurt Exchange as PSMGn, recently received an upgrade from Kepler Cheuvreux, moving from a "reduce" to a "hold" rating. This shift follows the stock’s recent adjustment toward its intrinsic valuation after a sustained period of underperformance after Italian broadcaster MFE’s acquisition.
As of Tuesday, ProSiebenSat.1 shares closed at EUR4.85, indicating modest potential appreciation, approximately 3.1%, to Kepler’s unchanged EUR5.00 target price outlined in their January 22 research update. The stock, which faced a minor decline of 0.4% so far this year, remains well below its peak of EUR8.43 within the previous year.
Kepler analyst Conor O’Shea commented that the share price’s alignment with fundamental value occurs after a protracted downturn following the close of MFE’s bid window. He highlighted that the market's pricing now coincides more closely with the company’s intrinsic worth based on their analysis.
MFE currently controls a 76% stake in ProSiebenSat.1, culminating from a transaction involving cash and shares. This deal initiated significant leadership shifts—appointing MFE’s group CFO, Marco Giordani, as chief executive officer, with Bob Rajan stepping in as CFO. The Italian broadcaster pursues targeted synergies valued at €200 million, though uncertainty persists regarding both the timing for gaining full control and the possibility of delisting the company from public trading.
The German television advertising segment proved weak in 2025, with ProSiebenSat.1’s net advertising revenues trailing 15% below their 2019 performance. Despite these headwinds, ProSiebenSat.1 remains a key player alongside RTL Group in the free-to-air German TV market, jointly commanding roughly 40% of advertising revenue share.
Kepler Cheuvreux maintained its third-quarter-based forecasts without revision. Projections for 2025 include sales of €3.76 billion, marking a 4.2% decrease from the previous year's €3.92 billion, while adjusted EBITDA is expected to decline by 21.4% to €438.3 million. This translates into a margin contraction, with adjusted EBITDA margins shrinking to 11.7% from 14.2%. In 2026, outlooks suggest a moderate rebound, with sales anticipated to reach €3.81 billion, reflecting a 1.5% increase, alongside adjusted EBITDA of €453.3 million.
Advertising revenues within the DACH (Germany, Austria, Switzerland) region are forecast to grow by a modest 0.8% in 2026, matching expectations set for RTL Group. Segmented revenues place the Entertainment division at €2.47 billion with a 13.2% margin for 2025, while Commerce & Ventures and Dating divisions are projected to generate €978 million and €307 million respectively.
Net financial debt levels are estimated to reduce from €1.57 billion at the end of 2024 to €1.27 billion in 2025, and further down to €1.20 billion in 2026, despite refinancing processes that extended maturities through 2030 but simultaneously increased annual finance expenses by around EUR20 million.
Free cash flow forecasts indicate €62.7 million in 2025 and €87.7 million in 2026, which equate to yields of 5.7% and 8.0%, respectively, based on the current market cap of approximately €1.1 billion.
The analyst report expressed reservations regarding further cost-saving synergies after years of reductions under former CEO Bert Habets. Additionally, skepticism remains about the viability of cross-border free-to-air television business models amid shifting industry dynamics.
From 2018 through 2025, ProSiebenSat.1’s advertising revenues in the DACH region have decreased cumulatively by 20%, reflecting enduring structural pressures stemming from declining audience engagement and competitive gains by RTL. The forthcoming outlook for German television advertising revenue in 2026 remains uncertain, according to Kepler Cheuvreux.
Risks
- The timing and realization of projected synergies remain uncertain, considering prior extensive cost-cutting efforts.
- Advertising revenue in the DACH region faces structural declines, with a 20% cumulative fall for ProSiebenSat.1 since 2018, posing ongoing market risk.
- Unclear outlook for German television advertising growth in 2026 introduces forecast risk for future earnings.