Can Televisa Bounce Back from the Abyss?

Televisa's Q3 nosedive saw shares plummet 7.77%, hitting historic lows. Citi analysts cut price targets, and a 12% Ebitda drop is anticipated. Can this Mexican media giant script a comeback? Stay tuned.

Can Televisa Bounce Back from the Abyss?
Televisa's stock crash: Shares hit historic lows, as financial turmoil engulfs the media giant. Credit: Wikimedia

In the tumultuous world of finance, few spectacles are as captivating as watching a corporate giant stumble, and stumble Grupo Televisa did! The Mexican media mogul, known for its telenovelas and news broadcasts, had a dizzying fall from grace in the third quarter of 2023. Shares plummeted like a lead balloon, dropping 7.77 percent, marking their worst variation in eight months.

But that's not the half of it. The stock's value dived to a meager 9.49 pesos each, hitting a nadir not seen since June 1998 when it was trading at a meager 8.70 pesos. It's almost like Televisa took a trip to the time machine and landed in the late '1990s, with its shares seemingly stuck in the past.

If you thought the Titanic sank fast, you should meet Televisa. In a plot twist that even the most fervent telenovela fan did not see coming, Televisa became the company with the most dramatic falls within the S&P/BMV IPC sample. And it wasn't alone in its woes – Grupo Aeroportuario del Pacífico (GAP) and Volaris, two other corporate adventurers, were in hot pursuit, entangled in their web of technical and financial difficulties. It's a bit like a turbulent soap opera, but with shareholders on the edge of their seats.

Monday afternoon brought no respite, as specialists from Citi Research swooped in like the antagonists of this financial thriller, estimating that Televisa's Ebitda for the third quarter would take a jaw-dropping 12 percent annual nosedive. Ouch! And if you thought that was harsh, hold onto your remote control because there's more.

Remember Izzi and Sky? Well, they're in for a bumpy ride too, as the experts anticipate some 30 thousand disconnections. It's like a classic cable TV drama – will the subscriptions come back for a dramatic reunion, or are they gone for good? The suspense is killing us!

Televisa plans to lift the curtain on its financial results for the July-September period on October 24. The markets are already trembling in anticipation, their popcorn buckets at the ready.

Citi analysts, armed with their pens and calculators, also decided to chop down Televisa's share price target on the New York Stock Exchange. It went from a somewhat optimistic 8.5 dollars per share to a dismal 5 dollars. Is this the beginning of a financial horror movie for the company?

Gerardo Cevallos, an analyst at Vector, suggests it might be. He's not seeing roses and sunshine. Vector, in their forecast, paints a bleak picture, with a predicted 4.5 percent drop in revenues for Televisa. That's not a statistic they'll be celebrating with mariachi bands and piñatas.

In a year that should have been a carnival, with markets spinning like teacup rides, Televisa's shares did a somersault into despair, accumulating a 46.44 percent loss from where they started in January. The value of the company on the BMV shrunk from a princely 49 billion 639 million pesos to a humble 26 billion 584 million pesos. That's quite the haircut, don't you think?

To add another layer to this economic telenovela, in July, Televisa reported a dramatic annual drop in net income for the second quarter. So, it appears that 2023 has been a year full of unexpected plot twists for this entertainment powerhouse.

The question on everyone's mind now is, will Televisa manage to claw its way back from the abyss? As the financial drama unfolds, investors are undoubtedly glued to their screens, waiting to see if the next episode of this corporate soap opera will be a heart-pounding thriller or a heartwarming comeback story.

Whatever happens, one thing is certain: in the world of finance, there are no guarantees, and every company, no matter how iconic, can find itself on the edge of a precipice, ready to take a dramatic fall. Stay tuned for the next episode in the saga of Grupo Televisa's rollercoaster ride.