The media industry is expected to benefit from the Federal Budget. Here are some ASX200 shares that Morgan Stanley thinks you should buy.
The post Broker eyes these ASX 200 shares following Federal Budget appeared first on The Motley Fool Australia. –
The 2021-22 Federal Budget features $1.2 billion in government spending over six years to drive Australia’s digital economy. Morgan Stanley believes these initiatives support its bullish view of the media sector. Here are some ASX 200 media shares the broker thinks could see upside.
ASX 200 media shares on broker’s radar
Nine Entertainment Co Holdings Ltd (ASX: NEC)
Morgan Stanley observes a relatively small benefit to commercial free-to-air broadcasters from reduced funding for public broadcasters ABC and SBS. The broker reiterated its overweight rating for Nine shares with a target price of $3.50.
The Nine share price has been surging into record territory in 2021 following bullish earnings and a greater commitment to its digital platforms. These include video subscription platform Stan, a majority investment in Domain Holdings Australia Ltd (ASX: DHG) and digital advertising. Nine shares closed at $2.82 on Friday.
News Corporation (ASX: NWS)
News Corp was another company expected to benefit from changes in the Budget. Morgan Stanley says the extra funding allocated to the industry regulator, Australia Communications and Media Authority (ACMA), signals that the government is confident about the outcome of its digital licencing payments with Google and Facebook.
The broker rates News Corp shares as overweight but its target price was not assessed. The News Corp share price closed the week trading at $31.80.
REA Group Ltd (ASX: REA)
The budget includes some additional funding for first-home buyers and superannuation incentives to encourage those aged over 60 to downsize their home, potentially freeing up more housing stock for younger families.
According to Morgan Stanley, this could add further churn to residential housing transaction volumes, which could, in turn, benefit REA Group.
The broker retained its overweight rating and $175 target price. REA shares have cooled off in recent days following broader weakness in the tech sector. Its shares closed at $147.70 on Friday.
Seek Limited (ASX: SEK)
Morgan Stanley highlights the government’s range of policy measures to drive the jobs market. These include new apprenticeships and training places, infrastructure investment and record funding for schools, hospitals and aged care. The broker suggests that the extra churn in jobs volume is expected to be helpful for Seek, alongside a new push for job seekers to undertake more online searching.
The broker is overweight on Seek shares with a current consensus price across big brokers being $29.87. It’s been a volatile start to 2021 for Seek shares, which have delivered flat year-to-date returns. The company’s shares are, however, up by almost 70% over the past 12 months. The Seek share price was fetching $28.92 by Friday’s close.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Facebook, REA Group Limited, and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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