- JPMorgan has downgraded Grupo Televisa (NYSE:TV) amid rising costs, but notes it still faces a better regulatory environment than rival America Movil (NYSE:AMX).
- The firm lowered its rating on TV to Neutral from Overweight, and trimmed its price target from $31 to $30, just 6.8% above today's close of $28.09.
- Despite improvements in ad revenues, the company's content EBITDA is expected to drop 6%, JPMorgan says, with incremental costs from streaming service Blim. Analyst Andre Baggio expects a drag of five percentage points to segment margins from content spending.
- But ad revenues should stabilize after dropping 10% last year, and: "We expect cable to continue to gain share from AMX in broadband, due to superior offers at competitive prices. Also, DTH and cable should benefit from the analog switch-off, which is boosting demand."