Liberum downgrades DMGT in 'a tricky call'

Analysts at Liberum downgraded Daily Mail and General Trust on Thursday over concerns regarding its Middle Eastern events operations and changing trends in online advertising.

The broker, which cut its recommendation to 'sell' from its previous 'neutral' stance, said that among its worries was a slowdown in the Middle East, where DMGT's events business is based, and a shift in online advertising towards more video-based content.

Liberum said the downgrade was "a tricky call" as the broker stated it could clearly see that management was taking the right steps to right the shop and that DMGT's net cash position gave it "firepower to reshape its business".

However, analysts believe that the Daily Mail, Mail on Sunday and Metro owner's numbers for 2019 were under pressure from "rising print prices and, less so, slowness in events."

"We also have concerns MailOnline's decline in top-line growth is maybe more structurally, than cyclically, driven," analysts added.

Liberum lowered its target price on DMGT to 685p from its previous 765p marker.