Analyst Note| Brian Han |
We lift our fair value estimate for Nine by 8% to AUD 2.60 per share. Of the AUD 0.20 upgrade, AUD 0.14 primarily reflects increases to our longer-term EBITDA forecasts for 9Now and higher revenue expectations for Stan. 9Now’s growth momentum continues to positively surprise, as evidenced by the 48% increase in its fiscal 2021 EBITDA to AUD 73 million versus our AUD 63 million forecast. While Stan’s recent earnings escalation will be halted by a step-up in content spend, we see the investment as boosting the SVOD unit’s future sustainable revenue base. The rest of the upgrade relates to incorporation of Morningstar’s recent fair value estimate increase for 59%-owned Domain to AUD 3.80, from AUD 3.50 previously.