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Sky friendless after update; City analyst downgrades

Earlier, the pay-TV giant reported sales were up 5pc to £3.1bn in the three months ended September.
Sky friendless after update; City analyst downgrades
Off the shopping list - the shares were downgraded earlier.

Sky PLC’s (LONSKY) share price is up with events, according to one City analyst, who downgraded stock in the satellite broadcaster in the wake of its first-quarter figures.

Shore Capital’s Roddy Davidson has gone to ‘hold’ from ‘buy’ after reviewing his “fair value calculations”.

He is one of seven analysts following Sky that hold ‘neutral’ ratings on the shares.

A further 10 are ‘buyers’ or ‘strong buyers’, with only two sellers, according to the Broker Forecasts site that tracks stock recommendations.

Sky’s shares, which have fallen 23% in the year to date, were friendless in afternoon trade as they eased a further 2%.

Earlier, the pay-TV giant reported sales were up 5pc to £3.1bn in the three months ended September.

Subscriber numbers rose by 106,000 over the period but that was lower than last year's rise of 134,000.

Advertising revenue in the UK and Ireland fell 3%, although the company said that was better than the overall market.

Despite the downgrade, Shore analyst Davidson was reasonably upbeat on Sky’s financial performance.

“We are encouraged by the revenue, headline cost, and operational momentum summarised in this morning’s update, and are positive on Sky’s business model, and track record of growth, innovation and customer focus,” he said in a note to clients.

“We see revenue growth potential from a combination of existing and new customers and a range of new product initiatives going forward and (although some challenges must be overcome) expect further progress by Sky Italia and Sky Deutschland to make a useful contribution to medium-term progress.”

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