The ITV (LON: ITV) share price plunged to the lowest level since March 23 after the company warned about its advertising business. The shares fell to a low of 73p, making it one of the top underperformers in the FTSE 250 index. It has fallen by 21% from the highest point this year.

ITV advertising business

One of the top media news on Thursday was the latest results by ITV.  In its statement, the company said that its total external revenue dropped by 7% to £776 million. ITV Studio revenue remained flat at £457 million while media and entertainment revenue crashed by 9% to £495 million. 

The company also published a relatively weak forward guidance. It expects that uts Studio business will have at least 5% organic revenue growth to 2026. Also, the company expects that the ITVX business will do well, helped by titles like Malpractice, Crime, and Love and Death. 

ITV is also planning to cut costs as its business slowed. The company expects that it will deliver up to £15 million in savings this year as part of its £50 million cost cuts by 2026. 

As I wrote here, I believe that ITV lacks clear catalysts to make it a good investment. At the time, I noted that the company will likely continue struggling as the advertising industry slumps. Most companies are now preserving cash by slashing their advertising budget.

Further, I noted that the ITVX product will likely see slower growth in the coming years. For one, the cost of living crisis has seen more people end their discretionary spending. These measures likely mean that the company will be in a defensive mode.

ITV share price forecast

ITV chart by TradingView

The daily chart shows that the ITV stock price has been in a slow downward trend in the past few days. It is now sitting at a key support at 73p, which was the lowest point on March 20. The shares have moved below the 50-day exponential moving average while the Relative Strength Index (RSI).

It has moved below the 38.2% Fibonacci Retracement level. Therefore, the shares will likely continue falling as sellers target the next key support level at 66.32p, the 61.8% retracemet level. A move above the key resistance point at 80p will invalidate the bearish view.

The post ITV share price analysis: plot thickens as ad revenue slumps appeared first on Invezz.

Author