afr: ten undervalued says morgan stanley, page-18

here's what the brokers are sayings on TEN....

Citi 25-Sep-12
Target $0.40 (was $0.58). With things still heading south at Ten in terms of audiences and revenues, the broker has revisited its forecasts and now thinks the company will post a loss in FY13.

Citi moves to cut its FY12-14 net profit forecasts by 126%, 108% and 50%, which takes a chunk out of the price target. With sharers already priced for a big earnings recovery and the risk levels continuously increasing, the broker remains at Neutral, caught between valuation and outlook.

Neutral

UBS 09-Aug-12
UBS has lowered earnings forecasts for TEN to account for its view a top-down recovery in the sector is unlikely to become evident until 2H13 at the earliest.

The changes see price target cut to $0.40 from $0.55. UBS retains a Sell rating on TEN.

Sell

Deutsche Bank 23-Jul-12
Target $0.41 (was $0.49). The broker notes the announced sale of the outdoor business helps to de-risk balance sheet, while providing some cash for much a needed investment in new TV programming.

But with ratings still poor, costs rising and the ad market weak, the broker calls Ten a high risk FY14 turnaround, with little in terms of earnings prospects in FY12-13. The Sell call is maintained, with a cut to FY13 earnings causing the drop in price target.

Sell

BA-Merrill Lynch 23-Jul-12
BA-ML notes Ten is set to sell its Eye Corp subsidiary to private equity for a headline price of $145m. Leverage will improve and the broker thinks if the company's spends the money wisely, ad revenue share could increase enough for the broker to see fair valuation near current levels.

Until then, the Underperform call is maintained.

Underperform, High Risk

RBS Australia 23-Jul-12
Target $0.42 (was $0.45). TEN has sold the EYE outdoor business and the price received is in-line with the valuation of RBS.

To reflect the sale and ongoing TV weakness the broker trims earnings estimates and price target. A sell rating is retained as TEN remains expensive on RBS's numbers.

Sell