ProSiebenSat.1 Drops After Citigroup Downgrade: Frankfurt Mover
ProSiebenSat.1 Media AG (PSM), a German broadcaster controlled by KKR & Co. (KKR) and Permira Advisers LLP, fell the most in two weeks in Frankfurt after the company was cut to neutral from buy at Citigroup Inc.
The shares fell as much as 3.4 percent, the biggest intraday fall since June 25 and were trading down 0.55 euros, or 3 percent, to 17.6 euros as of 11:55 local time. The Unterfoehring, Germany-based broadcaster has added 25 percent this year, valuing the company at 3.85 billion euros ($4.73 billion), compared with a 17 percent increase in the German DAX Mid-Cap Index. (MDAX)
European media companies face an “opaque” outlook as China and other emerging markets “appear to be slowing,” alongside risks in Europe, while the U.S. faces “serious fiscal challenges into 2013,” Citigroup said in a note. The bank cut its price estimate for ProSieben shares to 20 euros from 22 euros.
“When GDP growth is below 1 percent, this usually means that the advertisement market falls into recession,” Conor O´Shea, an analyst at Kepler Capital Markets, said by phone today. “ProSieben is probably the only free-to-air broadcaster in Europe where a contraction in advertising hasn´t been priced in.”
Of 32 analysts covering ProSieben shares, 20 recommend buying the share and four advise clients to sell, according to data collected by Bloomberg.
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