ITV led the FTSE 100 fallers today after Bank of America Merrill Lynch analysts slashed their target price for the broadcaster amid fears of declining advertising.
Shares in ITV fell almost seven per cent after the bank changed its rating from buy to underperform and cut its target price from 210p to 110p.
The US bank cited declining advertising market share as the major factor in its decision, as the rise of on-demand streaming services draws ad revenue away from linear programming.
In November ITV warned of slowing advertising revenues, with total intake expected to be flat for the full year.
Bank of America's 110p target price is well below ITV’s current share price and represents the firm’s lowest price since 2012.
David Madden, market analyst at CMC Markets, described the target price cut as “quite considerable”, adding it was “indicative of how bearish they are on the stock”.
Traditional TV advertising is coming under increased pressure from tech firms such as Facebook and Google as brands shift their marketing spend to digital formats.
Last year Facebook pulled in global advertising revenues of $54.4bn (£42.1bn), with the figure set to rise to more than $80bn by 2020, according to a report by eMarketer.
But analysts also said fears of a global slowdown, combined with uncertainty around Brexit, may be accelerating concerns about reduced advertising revenue for the broadcaster.
ITV today launched a campaign with ad shop Uncommon aimed at encouraging so-called light viewers to tune in more often.
The marketing push is part of the company’s ‘More than TV’ plan, which looks to focus on content production and reposition the broadcaster as a creative brand.
But Roddy Davidson, media analyst at Shore Capital, said the impact of the new strategy has not yet been felt.
“Proof of the pudding hasn’t come through yet,” he said, adding advertising is crucial for short-term revenue.