Up 6%, can this ‘dirty’ stock continue to outperform the rest of the FTSE 250?
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I FTSE 250 is fighting for momentum again as conflicts in the Middle East shake investors. But not all UK mid-cap stocks are stuck in the mud. ITV (LSE:ITV) shares ended the week trading flat after releasing full year trading numbers.
At 83.2p per share, ITV’s share price was last up 6% on Friday (6 March). Analysts called the company’s 2025 update “the story of amber in the dark” — The broadcaster’s shares are now up 9% over the past 12 months.
What is happening in the world I’m a Celebrity… the manufacturer? And should investors consider buying a share of the FTSE 250?
Managing a difficult environment
Things haven’t been easy for ITV as tough conditions in the advertising market have taken a toll on revenue. It also struggles with the continued decline of linear TV as streaming services gain popularity. Yet 2025 was as much a matter of resilience as anything else.
At £4.1bn, the group’s revenue was essentially unchanged from the previous year. That’s despite advertising sales falling by 5% year-on-year, to £1.7bn. Adjusted pre-tax profits fell by the same percentage to £448m.
Once again a division of the production company ITV Studios has come to the rescue to stop the sale. Revenue here rose 5% last year, to £2.1bn, a new record high. ITV is ‘making lemons with lemons’ so to speak, and is capitalizing on the growing demand for content from broadcasters.
It is also turning the broadcasting boom to its advantage with its ITVX platform. The company has invested heavily in systems and technology, and this is paying off handsomely. Indeed, ITV has recouped its entire investment four years ahead of schedule.
As commentator Garry White of Charles Stanley notes, this “a rare achievement in a broadcasting industry plagued by multi-billion dollar lossesThe number of monthly active users on ITVX increased by 12% last year, to 16.5m.
What could go wrong?
My takeaway from ITV’s review is that things could have been worse. Its performance in 2025 was one that spoke of strong execution in a difficult environment. But profits continue to decline year after year, and 2026 could be even tougher.
ITV Studios contacted “another year of good growth” and other market-beating performance. But ad sales are expected to be negative, with total Q1 ad revenue down 2% as advertisers wait to consolidate activity in Q2 and Q3 when the soccer World Cup begins.
But can sales here remain under pressure beyond this quarter? I think so, with the conflict in the Middle East threatening to send shockwaves through the global economy. This could also see broadcasters return to spending on content.
Can ITV shares be bought?
There’s a lot I like about ITV, and I think it does a good job of navigating the years of broadcasting. But should I buy its shares right now?
It won’t, but mainly because of the company’s FTSE 250 valuation. The forward price-to-earnings ratio (P/E) of 13 times does not reflect, in my opinion, the risks facing this very leading stock today. If the ad market falls off a cliff, I think ITV’s high valuation could cause its share price to drop significantly.
