Fly to the Mondadori Stock Exchange, promoted by Mediobanca to “outperform” on the bet that nice surprises will come from the book division, which could compensate for the further deterioration of the advertising market. The title earn more than 10% at 1,13 euros with high volumes after Piazzetta Cuccia raised its rating to "outperform" from "neutral", with a target price of 1,42, setting a target price of 1,42 euros which means a potential increase of 34% compared to the current price. A surprising prediction in lean times for publishing. But even more surprising or, in any case, unprecedented the explanation: the rally will take place "in the wake of the good performance of the book sector", driven by the Fifty Shades trilogy and, perhaps, by the new Ken Follett, despite the bank drastically cutting its 2012 estimates due to weak advertising.
In particular, the revival of the Segrate house has 50 good reasons, as many as the "Fifty shades of gray" sexy in pink trilogy written by miss ELJames, which hasn't made the critics scream like a miracle but is bringing the administrators of world publishing to orgasm, not excluding the architect Costa. The three books continue to be among the top 5 Italian best-sellers but the phenomenon is now worldwide: copies sold worldwide were 40 million (25 million in just four months) with more than 12 million copies sold in the UK and over 25 million in the US. A boom destined to last thanks to the CDs and films announced for next season.
There is enough to compensate for the effects of budget forecasts that are equally gray but, thanks to Miss James, less black than the numbers of the Stock Exchange say where, until a few sessions ago, the signs of awakening of the stock were associated to a possible takeover bid by Fininvest, given the depressed prices and prospects. For this year Mediobanca expects revenues to fall to 1,437 billion from 1,51 billion in 2011, an Ebitda of 89 million (-26,4% from previous estimates), an Ebit of 59 million (-42,2% on old estimates), a net profit of 21 million (with a 53,3% cut in estimates) from 50 million in 2011 Lastly, the report does not envisage the distribution of a dividend, as for the 2011 financial year.
But there is no shortage of positive notes, starting with always less dependence of the group on advertising revenues (14,6% estimated in 2012 from about 20% in 2007), to continue with investments in new media (NaturaBuy, Kobo), which are comforting in perspective.
It's too early, writes Mediobanca, to predict whether the Kobo e-reader, which allows the purchase and reading of books in multimedia format, will become a potential rival to Amazon's Kindle, but the price is very competitive (99 euros for the moment) and the offer of titles is very wide (about 3 million books). In short, the company is trying to exploit the potential of the Italian e-book market in the wake of what is happening in the United States where one book out of four is read through a digital device, while in Italy multimedia use is only equal to 1% of the total. In the USA, in addition to the success of Amazon thanks to the Kindle, the e-book effect has allowed Barnes & Noble to emerge from the crisis thanks to the Nook reader.
Finally, the cost-cutting policy should "give good results in the near future". In summary, “at current market prices, the downside risks linked to the trend in advertising sales should be limited, while the book division could bring nice surprises to investors“ concludes Mediobanca. Once upon a time, even for austere bankers, it's a matter of nuances.
In Piazza Affari, among the Italian editorials, L'Espresso, Class, Rcs also go up. On the Via Rizzoli group, Alessandro Proto's announcement – from which confirmation is awaited with communications to Consob – of having raised 2,8% of the capital through four investors gathered in a shareholders' agreement should be noted.
