Mediaset Jumps on Outlook for Advertising Market: Milan Mover

Mediaset SpA had the biggest gain in 13 years as analysts including those at Berenberg Bank expect a recovery in the advertising market to benefit the broadcaster controlled by former Italian Prime Minister Silvio Berlusconi.

The stock jumped as much as 13 percent to 2.16 euros, the steepest intraday rise since February 2000, and was up 8 percent as of 10:35 a.m. in Milan, extending yesterday’s 9 percent gain. The company, which has a market value of 2.43 billion euros ($3.24 billion), is the best performer in the benchmark FTSE MIB index this year with a 32 percent gain.

Mediaset is the second-best performer on the STOXX Europe 600 Index this year after Bankia SA.

“Mediaset’s share price has roared ahead in 2013, as enthusiasm to buy the declining Italian yield has increased,” Berenberg Bank analyst Sarah Simon wrote in a note today. “We continue to see Mediaset as the best recovery story within the European media sector.”

Simon, who has a buy rating on the stock, increased her price estimate to 2.6 euros from 1.9 euros.

Credit Suisse yesterday upgraded Mediaset to outperform from underperform after being negative on the company for more than two years. The increase reflects “the recovery potential of the Italian TV advertising market and initial indications from media buyers that 2013 could be significantly less bad than 2012,” it wrote in the note yesterday.

Mediaset, which runs free-to-air and pay-TV channels, in November reported losses for the third quarter and the first nine months and cut its full-year profit forecast.

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