The FTSE 100 and FTSE 250 are rocketing as optimism surrounding interest rate cuts rise. This can make it harder for investors to find value stocks to buy.

ITV (LSE:ITV) is a UK share that’s risen strongly during the recent bull run. At 76.2p per share, Britain’s biggest commercial broadcaster has gained 22% since the start of 2024.

However, I still feel that this blue-chip share remains massively undervalued today. And following fresh trading news, I think now could be a good time to load up on the FTSE 250 stock.

Strike woes

Thursday’s (9 April) first-quarter update wasn’t exactly the strongest financial release in ITV’s history. In it, the Love Island and Coronation Street creator announced a 7% decline in group revenues, to £887m, as turnover at ITV Studios dropped 16% to £382m.

Production unit sales plummeted primarily due to strikes last year by US creative writers and actors. Trading was also impacted by weak demand from free-to-air broadcasters in Europe, in addition to a heavy weighting of programme deliveries to the second half of 2024.

Streaming success

Yet ITV’s quarterly statement still underlined the incredible growth potential the company has.

First off, viewing figures at its ITVX streaming service continue to grow spectacularly as watcher habits continue to evolve.

Total streaming hours rose to 449m hours between January and March, up 16%. And as a result, digital revenues increased 11% from the same 2023 period.

Encouragingly, ITV has vowed to build on this momentum “through further developments in content, product, distribution and marketing“, too. Digital revenues remain on track to hit a minimum of £750m by 2026, the business says.

While ITV Studios has endured some bumps more recently, the profits potential here is also considerable. ITV’s production arm remains on course to deliver average organic revenue growth of 5% each year from 2021 to 2026, the firm said yesterday. This is ahead of the broader market.

In recovery?

A good argument can be made that things could get much, much better for ITV from here. Its streaming platform continues to perform spectacularly, strike action in the US is over, and there’s a strong chance that advertising revenues will accelerate.

Total ad sales are expected to rise to 12% in the second quarter, up from 3% during quarter one, thanks in part to the UEFA European Championship in June.

Conditions could continue improving beyond the football tournament, too, if — as expected — the Bank of England starts slashing interest rates over the summer.

A top value stock

As I say, ITV’s share price has risen strongly recently. But its valuation still looks remarkably low in my opinion. It trades on a forward price-to-earnings (P/E) ratio of 8.8 times.

On top of this, at current prices the dividend yield sits at 6.6%, cementing the company’s appeal as an attractive value stock.

A fresh downturn in the ad market could hamper a recovery at ITV. But on balance, I still feel it’s one of the best bargain stocks for investors to consider right now.