It’s been a shaky couple of years for the ITV (LSE:ITV) share price. Since reaching its peak in 2021, shareholders have been patiently waiting for management’s aggressive multi-billion pound investment in content creation and its new-ish ITVX platform to pay off. Yet looking at the latest results, this might be just around the corner. And with the stock trading at just 7.7 times earnings, investors could be about to witness a welcome surge.
With that in mind, let’s explore just how much higher ITV’s share price could climb over the next 12 months.
Investments are starting to deliver
ITV’s revenue growth in 2024 was fairly mediocre. However, considering the company’s studio segment was heavily disrupted by the actor and writer strikes, this wasn’t entirely a surprise. Yet while the top line failed to impress, the same can’t be said for underlying earnings.
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The firm’s profits were up by double-digits on the back of margin expansion driven by a bigger than expected £60m annualised saving as well as a more favourable product mix. Consequently, management has announced its investment in ITVX is now on track to break even by the end of 2025, ahead of the original timeline.
Speaking of ITVX, the ad-driven streaming service is still rapidly expanding, with monthly active users now sitting at 14.3m. That’s just over 20% of the British population, steadily catching up to BBC iPlayer’s popularity. Unsurprisingly, with the number of viewers rising by 1.8m, total streaming hours have increased from 1.5bn to just shy of 1.7bn. And with more people on the platform for longer, ITV has more opportunities to serve high-margin digital ads.
ITV’s share price forecast
Needless to say, this is all rather positive. So, what are analysts projecting over the next 12 months?
Right now, the most optimistic forecast is for the ITV share price to rise to 105p by March 2026. Compared to where the stock is trading right now, that’s a roughly 33% increase. So investing £1,000 right now could grow into £1,330 by this time next year.
However, not everyone is convinced that ITV has proven itself yet. Looking into 2025, management is actually guiding for a slight hit to profit margins as it plans to develop more scripted shows next year. These projects are indeed more expensive to produce. But they’re also how the world enjoyed blockbuster hits like Mr Bates vs The Post Office.
Another successful show of this scale could attract even more viewers to ITV’s streaming service. Of course, that’s far easier said than done. And if 2025 proves to be a year of duds, then the shares could actually slide by 11% to 70p based on more pessimistic analyst opinions.
Time to buy?
All things considered, I’m cautiously optimistic about what the future holds. There are obviously no guarantees, and ITV’s continued success will depend on its ability to produce popular shows that attract new viewers to its platform. That does add risk to an investment. But given its recent track record, management seems to have its finger on the pulse for now.
My portfolio already has sufficient exposure to this sector, so it’s not an opportunity that I’m rushing to buy right now. But for investors keen to capitalise on the rise of ITVX, now might be an excellent time to take a closer look.
