Down 31% since August: This ASX All Ords media stock is tipped to rebound
The ASX All Ordinaries Index (ASX: XAO) is trading in the green today, up 0.06% at the time of writing. But this ASX All Ords media stock is outpacing the index gains for the day already.
At the time of writing, oOh!Media Ltd (ASX: OML) shares are also trading in the green, up 0.16% for the day at $1.26 a piece.
The ASX All Ords stock has shed 31.6% of its share price since August, after investors reacted poorly to its H1 FY25 results. For the year-to-date, the share price is still 6.05% higher.
Just last week Macquarie Group Ltd (ASX: MQG) tipped a 45% upside for the shares over the next 12 months. But in a note to investors this morning, the broker has revised its expectations on the ASX All Ords media stock.
The media company released a trading update late last week which revealed updated guidance for 2025. The company expects revenue to be slightly below the 2024 calendar year, in the range of $689 million to $694 million and adjusted EBITDA to be $139 million to $142 million including NZ restructuring costs.
Target price cut on oOh!Media shares
The broker has maintained its outperform rating on the shares. But it has lowered its 12-month target price to $1.45, down significantly from the price target of $2 just last week.
At the time of writing that represents a potential upside of 15.1% for investors.
"Target price =A$1.45/sh (A$2.00/sh previously), based on 12x 12-month forward P/E, which is now a 15% discount to its long-run average (14x). Improved visibility and ad trends would support a higher multiple," the broker said in its new note to investors.
oOh!media has significant operating leverage and the ad market has been see-sawing through 2025, with commentary now suggesting we are through the worst of it. Valuation is attractive, on 10x 12-months forward P/E (vs. 14x through the cycle avg.), and an improved ad market would support a re-rating.
What else did the broker have to say about the ASX All Ords stock?
Macquarie analysts noted that oOh!Media's updated guidance implies 4Q25 will be down a few percent, which is the biggest ad spend quarter.
Slowing revenues and mix (retail higher margin), will now see the gross margin at around 43% in 2025, whilst operating cost guidance is unchanged ($159 million to $161 million), and results in adjusted EBITDA of $139 million to $142 million in 2025. This is 9% higher than guidance, which was already 9% below Macquarie estimates of $154 million, and 7% below market expectations of $152 million.
We now forecast A$150m 2026 adjusted EBITDA, +8% yoy (previously A$170m); and is based on: 1) A$731m revenues, +6% yoy (+4%pts underlying + 2%pts net new contracts), 2) 43% gross margin, consistent with 2025, and 3) A$161m operating costs, +2% yoy, benefitting from cost-out annualisation.
The post Down 31% since August: This ASX All Ords media stock is tipped to rebound appeared first on The Motley Fool Australia.
Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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