Entertainment One Ltd (LON:ETO)’s (eOne’s) pre-close trading update confirms the group is trading well and is on track to meet full-year market forecasts. There is no change to our forecasts at this juncture. The group’s rights library has been independently reassessed and has increased to a value of US$2.0bn, from US$1.7bn at the time of the last valuation in March 2017. The group’s current market capitalisation is c £1.8bn (US$2.3bn). Recent strong share price performance has narrowed the discount to peers, but further positive news flow would allow additional upside.
In our recent update following the Capital Markets Day, we discussed the group’s transition to a pure-play content business, as well as describing the key trends and properties in the underlying segments. This morning, management has confirmed that Family & Brands continues its positive momentum in negotiating licence and SVOD (streaming video on demand) deals. In Film & Television, the trading update confirms a good pipeline of new series in development, underpinning our forecasts for this division.
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