Restatement: The buyback program launched by RTL is generating significant buzz
In a significant development for media conglomerate RTL, the company announced a share buyback of approximately 0.8 million shares via the stock exchange. This purchase is part of a larger buyback of 3.17 million shares, which concluded on September 12.
The buyback price, set at €37.85 per share, indicates RTL's willingness to pay top prices for its own shares. This high buyback readiness has not gone unnoticed by investors, who interpret it as a bullish signal. As a result, the RTL share price soared by around ten percent following the announcement, reaching its highest level since August 2023.
The repurchased shares will be used to settle the variable purchase price component for the planned takeover of Sky Deutschland. The settlement of these shares is scheduled for September 17.
RTL's continued buying behavior could suggest that the company may appear as a continuous buyer in the near future. This potential impact on the share price, along with the strong signal sent by RTL's expensive stock buyback, has led Börse Express to recommend urgent action for RTL shareholders.
The analysis provided by Börse Express on September 18 suggests that the management sees the shares as significantly undervalued and signals a positive outlook despite mixed financial results. The justification for the current valuation seems to be growth expectations, as analysts expect an annual earnings growth of 22 percent, well above the market average of 17 percent, over the next three years.
For those considering investing in or selling the RTL share, a new analysis from September 18 is available to provide guidance. The latest RTL figures suggest that urgent action may be required for RTL shareholders.
It's important to note that the RTL share is already trading at a high price-earnings ratio, which some may view as a potential concern. However, the high buyback price and the positive outlook indicated by the management's actions suggest that the current valuation may be justified.
Additional purchases via the market are likely to further support the share price in the near future, making this an interesting time for investors to watch the developments at RTL closely.
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