Two analysts who are closely monitoring Zee Entertainment Enterprises Ltd. (ZEEL) predict that the company’s stock could increase by as much as 20% within the next year. This projection is based on the positive statements made by the company about the potential rebound in advertising revenue.
In the period from April to June, Zee Entertainment’s revenue increased by 8% compared to the same time last year, reaching Rs 1,984 crore instead of the previous Rs 1,843 crore.
However, their earnings from domestic advertisements dropped by 2.6% from the previous year to Rs 901.8 crore.
Experts mentioned that the proposed merger of ZEEL and Sony Networks is an important factor to watch for the stock. The decision regarding the merger by the National Company Law Tribunal is expected to be announced later today.
UBS, a brokerage firm, gave Zee a ‘Buy’ rating and set a target price of Rs 265, suggesting a potential increase of about 10%. UBS highlighted that the results for the June quarter were as anticipated, and cost control measures partly offset the soft performance.
Zee’s management indicated that there were positive signs by the end of the quarter, and this positive momentum is predicted to continue, according to UBS.
CLSA, another brokerage, also assigned a ‘Buy’ rating on the stock with a target price of Rs 300, indicating a potential gain of 20%. They noted that ZEE5’s revenue grew by 21% during the quarter. CLSA adjusted its margin estimate for Zee slightly.
On the other hand, Goldman Sachs forecasts a possible decrease of 19% for Zee Entertainment. They have a neutral rating on the stock with a target price of Rs 195. Considering the quarterly results as weak, the brokerage revised down their revenue and EBITDA estimates for the financial years 2024-2026 due to slower-than-expected growth in advertisement and ZEE5 revenues, along with higher operating expenses.
Currently, Zee Entertainment shares are trading 3% higher at Rs 249.40 in anticipation of the NCLT verdict. Among the 24 analysts tracking the stock, 21 have a buy recommendation, two suggest holding, and one recommends selling.
News Source- CNBC