FNB Stockbroking and Portfolio Management said MultiChoice Group offers an attractive investment opportunity at current levels.
They recommend a long position in MultiChoice with an upside target price of R153 and a stop-loss at R111.
MultiChoice is the dominant pay-TV operator in Africa and offers a range of entertainment services, including DStv, ShowMax, and betting service KingMakers.
Apart from stakes in MultiChoice South Africa and MultiChoice Africa, the group also owns the technology platform Irdeto.
MultiChoice Group’s three content pillars – international, local, and sport – continue to hold a competitive advantage even as competition continues to rise.
Commenting on the technical analysis of the MultiChoice share price, FNB said MultiChoice’s share price remains in a symmetrical triangle pattern.
As such, it makes the share attractive as an investment opportunity.
“While the triangle is neutral, it still favours the direction of the existing trend. The expectation is for the price action to progress to the upper range of this pattern,” FNB said.
“According to the RSI (relative strength index), the share will be overbought at R175, making our profit target of R153 realistic.”
“Still, the trade idea is regarded as a counter-trend trade since the price remains below its 200-day simple moving average of R122.”
FNB Stockbroking and Portfolio Management suggested a low capital at risk allocation to this trade.