Nine Entertainment (ASX:NEC) Soars 10% on Optimistic Market Outlook from Rival Seven West Media (ASX:SWM)

2 min read | February 11, 2025 01:24 PM AEDT | By Team Kalkine Media

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Nine Entertainment (ASX:NEC) Soars 10% on Optimistic Market Outlook from Rival Seven West Media (ASX:SWM) — Image source: shutterstock

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Highlights

Nine Entertainment (ASX:NEC) shares see a 10% surge.

Seven West Media (ASX:SWM) predicts growth in advertising bookings.

Analysts foresee an earnings boost for Nine Entertainment.

Shares of Nine Entertainment (ASX:NEC) have seen a significant rise of more than 10%, climbing 10.5% to $1.42 on Tuesday. This surge comes after a positive outlook was shared by its major competitor, Seven West Media (ASX:SWM), regarding the advertising market. Seven West Media hinted that the weak advertising conditions which have prevailed recently might be beginning to improve, as bookings for the upcoming months are expected to show growth.

In a recent earnings update, Seven West Media indicated that the bookings for the three months ending on March 31 are likely to exceed those from the same period last year. This news has triggered optimism in the market, with analysts speculating that this shift in the advertising environment could benefit Nine Entertainment as well. The shift in market conditions signals a potential rise in advertising revenue, which is a key revenue stream for both companies.

Eric Choi, an analyst at Barrenjoey, noted that this development has led to "reasons to become cautiously optimistic" about the outlook for Nine Entertainment. With this information, Choi has suggested that the positive trends seen at Seven West Media could extend to Nine, indicating that its earnings could rise by up to $25 million, surpassing its current forecast of $441 million for the 12 months ending June 30.

This news has sparked renewed investor interest in Nine Entertainment, as the company operates not only the Nine Network, but also publishes The Australian Financial Review. As one of Australia’s leading media companies, the potential recovery in the advertising sector could significantly impact Nine's bottom line, benefiting both the company's financial results and its stock price.

The outlook for Nine Entertainment appears to be improving, fueled by broader optimism in the advertising market. As analysts adjust their expectations, investors are keeping a close eye on the future performance of Nine, with many anticipating a continued positive trend in the coming months.

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