THE media sector's annus horribilis appears to be easing in time for Christmas, with Fairfax Media leading a rally on Thursday as brokers finally found something to like in the embattled industry.
However, a shock profit warning by APN News & Media (see story above) after the market closed is likely to keep gains short lived.
Shares of Fairfax, the publisher of the Herald, rose more than 11 per cent to 54? after Commonwealth Bank equities analysts upgraded their valuation of the stock from 43? to 59?. The broker raised its earnings assumptions for Fairfax's real estate classifieds business. "The key change in our assumption is around the strength of Domain's print margins, which we estimate at 30 per cent, versus its digital margins at 35 per cent," said a CBA media analyst, Alice Bennett.
"There does seem to be a solid improvement in sentiment towards companies like Fairfax," said Simon Mawhinney at Allan Gray, which own a substantial stake in Fairfax.