Market analysts rate oOh!media a buy

Chris Pash
By Chris Pash | 5 April 2024
Credit: Kelly Sikkema via Unsplash

Analysts at investment bank UBS have opened their coverage of outdoor media specialist oOh!media with a buy rating.

They see the ASX-listed company as a "quality outdoor media operator" with about 39% out-of-home (OOH) market share in Australia and New Zealand.

"We view OOH as an attractive media format with multiple structural tailwinds," the analysts write in a note to clients.

These tailwinds include ongoing fragmentation of other traditional media channels, further digitisation, mainly of road and street billboards, increasing programmatic trading and an improvement in audience measurement via MOVE 2.0.

UBS is forecasting 5.9% annual revenue growth for the OOH industry and an increasing share in total ad spend.

The analysts have a share price target of $2.05. At last report, the shares were trading at $1.775.

oOh!media lifted revenue 7% to $633.9 million in the year to December, buoyed by a vigorous outdoor media market in Australia. Profit was up almost 10% to $34.6 million.

And to come this year are contributions from new contracts, including Sydney Metro Trains and the Woollahra Council in Sydney's income-rich eastern suburbs.

Woollahra, in Sydney’s eastern suburbs, is part of the money belt of Australia’s largest city. oOh!’s outdoor assets come online this month. 

The Sydney Metro rail line launches in the second half of the year.

oOh!media is also pushing into the fast growing retail media sector, launching reooh to create in-store digital screen networks.

When CEO Cathy O'Connor announced full year results in February, Morningstar equities director Brian Han described the earnings as "Unmissable Result Quality".

"Critically, success in concession renewals (75% of large contracts expiring in 2023 retained) and pending contributions from new contracts ... support our confidence in oOh media's maintainable earnings power," wrote Han.

Net media revenue for the out-of-home (OOH) industry increased 12.23% to $1.19 billion in 2023, according to the Outdoor Media Association. 

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