Nine Entertainment Co’s shares are tipped to make a successful stock market debut but analysts say there are longer term doubts about the company’s earnings.
The company, which owns the Nine Network, Ticketek and ninemsn, will list on the Australian Securities Exchange at noon AEDT on Friday with a list price of $2.05 per share.
That price is at the bottom of the range put forward in the company’s prospectus, which analysts say will give its shares room to move higher on Friday.
“The IPO price at $2.05 does give it a bit of room to move on the upside,” IG market strategist Evan Lucas said.
“I think tomorrow they will probably get away nicely… it should be an okay float,” he said.
At its listing price, Nine will be valued at $1.93 billion, making it the biggest initial public offering this year.
Mr Lucas said Nine’s first day performance should be better than that of Dick Smith Holdings, which finished its first day of trading on Wednesday flat at its list price of $2.20.
But he said questions remained about Nine as a long term investment due to the uncertain outlook for free to air television.
“There is always going to be a question regarding the advertiser revenue it is generating but its digital assets do look reasonable,” he said.
CMC Markets chief market analyst Ric Spooner said Nine shares wouldn’t be for everyone.
“It’s an industry where evaluations should carry a reasonable amount of risk premium and some investors may prefer to steer clear of it altogether,” he said.