Image source: Getty Images
oOhmedia Limited (ASX: OML) is Macquarie's top pick of media stocks at the moment, in a challenging market.
A recent report into the media sector rates oOh media as outperform, while the more diversified Nine Entertainment Co. Holdings Limited (ASX: NEC) and Seven West Media Limited (ASX: SWM) attracted a neutral rating.
The Standard Media Index, a measure of Australian agency ad spend, showed that July spend fell 12% year on year, which brings 2025 year to date to +1% year on year, and the past three-months down 5% year on year. For context, ASX listed media companies have talked to a slow 3Q25, but with suggestions that trends improve sequentially in 4Q25.
In contrast to the broader market, the out of home sector where oOhmedia "continues to outperform other categories" is up 11% so far this calendar year, Macquarie analysts said.
July 2025 out-of-home ad spend dropped 8% YoY (2025 YTD growth = +11%); however, given month-to-month volatility the trailing three-month average is a better measure in our view and is +4% YoY – this compares to the total ad market which has dropped 5% in the same period.
The broker has a target price of $2 on oOh Media compared with the current price of $1.67. It expects Seven West Media shares to appreciate marginally to 16 cents from 14 cents. In contrast, the broker expects Nine Entertainment Co. shares to fall sharply to $1.25 from $1.75.
Macquarie says it remains positive around advertising spending overall, with industry feedback suggesting a strong finish to the calendar year, particularly given the likelihood of another official interest rate cut in November bolstering consumer spending.
We continue to see the out-of-home category as a structural winner, with ongoing challenges within free-to-air TV, radio and print, and of which supports oOh!media as our top pick within traditional media. Importantly, out-of-home trends are expected to improve in 4Q25 (albeit with low visibility) with agency feedback talking to improvements and with rate cuts expected to support improved consumer sentiment/spending.
Macquarie said Nine Entertainment Co. and Seven West Media were both at risk from the structural decline of the print sector and the uncertainty around macroeconomic conditions more generally.
The broker said both also faced risks from potential wins and losses in sporting rights and other content in a competitive market.
