Investors have reacted strongly to Nine Entertainment Co Holdings Ltd’s (ASX: NEC) latest financial results, sending the company’s share price tumbling 10.46% in a single day. At the time of writing, shares are trading at $1.6475 each, despite having risen 22.04% over the past year. The sharp decline follows the release of Nine Entertainment’s FY25 results, which painted a mixed picture of the company’s financial health.
The media giant reported a modest 2% increase in revenue, yet saw a 6% drop in EBITDA. More concerning was the 10% decline in net profit after tax (NPAT) and a 12% drop in net profit after tax and minorities. Fully diluted earnings per share (EPS) also fell by 10% to 10.5 cents per share compared to FY24.
Macquarie’s Cautious Outlook
In response to these results, Macquarie Group Ltd (ASX: MQG) maintained a neutral stance on Nine Entertainment’s stock, albeit with a slight adjustment in its target price, now set at $1.25. This new target suggests a potential downside of 24.1% for investors over the next 12 months.
“Target price = A$1.25/sh, implying 5.5x EV/EBITDA (vs. 4.5x avg excl Domain recently) and 14.5x 12-month forward P/E. This excludes the A$0.49/sh special dividend (A$0.70/sh with franking benefits) with an ex-date of 11 September 2025,” Macquarie noted.
Macquarie also revised its earnings per share (EPS) forecasts, cutting them by 29%, 35%, and 33% for FY26, FY27, and FY28, respectively. The broker highlighted the challenges facing the media sector, including the structural decline in print media and low to mid-single-digit cost growth.
Challenges and Opportunities Ahead
Nine Entertainment faces a complex landscape, with its broadcasting and publishing arms under pressure. The company is cycling the benefits of the Olympic Games in 1H26, and overall market conditions remain challenging. However, there are silver linings. Macquarie forecasts potential growth for Nine’s streaming service, Stan, particularly following its acquisition of Optus Sport in August 2025. This move could justify higher pricing without significant customer churn.
Moreover, Nine Entertainment’s balance sheet offers some flexibility for mergers and acquisitions, which could diversify earnings away from its more challenged sectors. The broker sees fair value for the stock between A$1.74-1.95 per share, including the Domain special dividend and franking benefits.
Broader Industry Context
This development comes as the media industry grapples with rapid technological changes and shifting consumer preferences. Traditional media companies are under pressure to innovate and adapt, with many turning to digital platforms and content diversification to stay competitive. The decline in print media and the rise of streaming services are reshaping the landscape, forcing companies like Nine Entertainment to rethink their strategies.
Experts suggest that the future success of media companies will depend on their ability to leverage digital technologies and capitalize on new revenue streams. As such, Nine Entertainment’s focus on expanding its digital offerings and exploring potential acquisitions could be crucial in navigating these turbulent times.
Looking Forward
The coming months will be pivotal for Nine Entertainment as it seeks to stabilize its financial performance and regain investor confidence. The company’s ability to adapt to the evolving media environment and capitalize on growth opportunities will be closely watched by analysts and investors alike.
As the media landscape continues to transform, Nine Entertainment’s strategic decisions will play a critical role in determining its long-term success. Investors will be keenly observing how the company navigates these challenges and whether it can turn potential threats into opportunities for growth.
