Analysts at Citi have advised investors to take advantage of a recent pullback in a UK media company's shares, arguing that the sell-off has created an attractive entry point. The recommendation comes as the stock has fallen sharply in recent weeks, underperforming the broader market amid sector-wide headwinds.
While the note did not specify the exact stock, market sources suggest it could be a FTSE 250-listed broadcaster or publishing group that has seen its share price drop by more than 10% since the start of July. The FTSE 250 closed at 20,845 on Thursday, down 0.6% on the day, with media and entertainment stocks among the laggards.
Citi's analysts argued that the recent decline is not justified by the company's underlying performance, pointing to strong advertising revenue and a resilient subscription base. 'The market has overreacted to near-term noise,' the bank said in a research note. 'We see a compelling risk-reward at current levels.'
The broader media sector has been under pressure from rising interest rates and concerns about consumer spending, which have weighed on advertising budgets. However, some analysts believe that the worst may be over, with digital advertising revenue expected to stabilise in the second half of the year.
For UK investors and pension holders, the recommendation highlights the ongoing volatility in mid-cap stocks, which have been hit harder than their larger FTSE 100 counterparts. The FTSE 100 itself slipped 0.3% on Thursday to 7,415, with defensive sectors such as utilities and healthcare providing some support.