Shares in media and entertainment company HT&E Ltd (ASX: HT1) are sliding lower today and are now trading 5.44% down at $1.825 apiece.
HT&E shareholders have endured a bumpy ride these past few months but saw relief last week when the company's share price made a sharp turn to post a new 6-month high.
Here we unravel what's behind the move and what leading experts are saying on the outlook for HT&E investors.
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What's up with HT&E shares lately?
After a period of losses where the HT&E share price marched towards its 52-week low, the company advised last week that its contest with the Australian Taxation Office (ATO) is now over.
The company confirmed it had settled a long-standing tax dispute involving $195 million in tax adjustments, interest, and penalties for a New Zealand branch.
It agreed to pay a sum of $71 million after lengthy consultation with its advisors, acknowledging it was in the best interests of shareholders.
Shares in Here, There & Everywhere popped almost 31% on the day of the announcement. The company gallantly stated that investors can now look to HT&E's future with more certainty.
Now that it has settled its dispute, how does this fare for the HT&E share price?
One leading broker has chimed in, lending its outlook on the future for the company's shares.
What is Jefferies saying about HT&E share price?
According to analysts at investment bank Jefferies, the settlement bodes well for HT&E shares. Jeffries agrees the outcome is a good one for the entertainment company.
It said widespread consensus had baked in the entire $195 million liability with the ATO in forecasting HT&E's earnings, not expecting this more favourable result.
Even the broker itself had included a $90 million assumption for the tax liability in its modelling — almost $20 million more than the eventual settlement.
Furthermore, it said "many investors would not consider investing in HT&E because of its complexity and the unknown quantum/timing of this [ATO] dispute".
As such, the broker reckons the settlement will lift the veil of uncertainty for some investors who were perhaps hesitant on HT&E shares.
This, it believes, "will now open a much larger investor universe including possible corporate interest".
From its updated modelling, the broker raised its price target on HT&E shares by almost 9% to $2.50 per share.
At current standing, this implies an upside potential of 35% for HT&E investors to clamp their teeth into.
HT&E share price snapshot
HT&E shares have climbed 23% in the last year and are around 1% in the red this year to date. That's well behind the benchmark S&P/ASX 200 Index (ASX: XJO)'s return of about 25% in the past year.
Despite this, the company's shares have rallied 12% in the past month and gained more than 21% in this past week of trading.
