Peppa Pig's global march continues for Entertainment One, JP Morgan says
Peppa Pig has become a global brand, reinforcing the appeal of the character’s owners Entertainment One, JP Morgan analysts said.
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Merlin Entertainments' announcement that it would open as many as 50 Peppa theme parks underlines the durability of the cartoon pig’s appeal, JP Morgan said. The analysts retained their ‘overweight’ rating on Entertainment One shares and increased their target price to 546p from 423p.
The parks will add up to £17m of earnings for Entertainment One in direct licensing fees and will also increase brand recognition and drive merchandising sales, the analysts said.
The company books revenues from licensing for products such as toys and DVDs featuring Peppa and other characters in its family division.
While Peppa continues to thrive and extend her international reach other shows such as PJ Masks are doing well, meaning Entertainment One is likely to beat its target of doubling merchandise revenues by 2020, JP Morgan said.
"The opportunity in family appears significant," JP Morgan said. "The rollout of the family operations continues to perform particularly well in markets like the US and China."
Entertainment One could also be an acquisition target after attracting a takeover proposal from ITV in 2016, the analysts said.