Como se combate o populismo? "Com eleições", responde Fukuyama

[Kafka]

We reinitiate coverage of Impresa, with a YE06 target of
€6.10 per share and a Buy recommendation. We have also
revised our estimates for Media Capital and Cofina, having
lowered both valuations, which now stand at €5.50 and €3.30
vs. €6.80 and €3.45 previously.
! We are now more bearish on the Portuguese advertising
market, expecting only a marginal growth over the next two
years, despite the upcoming events of World Cup and Rock
in Rio. TV should be the most benefited segment. Press,
namely magazines, could be the most hit.
! Furthermore, Impresa’s SIC has changed the programming
team and now it is clearly looking to increase domestic
production. We believe this should pressure costs for the
group, as well as for TVI, at a time when there is much
doubts regarding top line evolution. In the long-run, we
expect TVI and SIC to have equal advertising share in FTA.
! With top line under pressure and costs tending to increase,
FTA operating margins could be somewhat under pressure in
the next couple of years.
! Despite this view on the sector economics, we still find
Impresa very attractive on valuation grounds. Under a
scenario of SIC maintaining its advertising share at 2005
levels (i.e. below its capacity share in terms of minutes), we
would reach a valuation of €5.40, 8% above the current
market price. The risk, in our view, is the case of SIC
increasing effort in production does not translate at all in
audiences and/or an even worse than expected advertising
market.
! The relevant decrease in our valuation of Media Capital’s TVI
has to do with (i) worse advertising market; (ii) lower longterm
advertising share; (iii) lower margins. The two last
reasons reflect SIC stance to go after domestic contents.
Media Capital’s valuation was also penalised by the other
divisions.
! Although our fundamental recommendation of Media Capital
is a Sell, we note that the latest changes in shareholder
structure have increased substantially the likelihood of a
tender offer at a price clearly above the fundamental one.
Pedro Mendes + 351 21 0037821
pedro.sousamendes@millenniumbcp.pt