Posted on 01/09/2008 12:50:50 PM PST by abb
NEW YORK Shares of several newspaper publishers fell to 52-week lows Wednesday as a Goldman Sachs analyst reduced his 2008 ad revenue forecast on economic worries, and named New York Times Co. as one of his least favorite stocks.
Analyst Anthony Noto reaffirmed his "Cautious" coverage of the sector, saying he is worried about further ad revenue declines occurring as recession fears gather momentum.
Newspaper ad sales dropped in recessions during 1999 to 2000 and in 2001, but a shift of readers to online formats has led newspaper publishers to report slowing ad revenue growth during healthy economic conditions the past three years, he said.
Noto anticipates ad sales will weaken further as economic conditions continue to deteriorate in 2008.
"We expect the classified categories to be very weak with the real estate, help wanted and auto categories particularly sensitive to broader economic activity," he wrote in a client note.
Noto said he now anticipates a 2008 ad revenue decline of 7.9 percent for the sector. He previously forecast a 2.6 percent drop.
The analyst lowered his New York Times 2008 earnings estimate to $1.05 per share from $1.09 per share, and cut his share price target to $12 from $15. He reduced his McClatchy Co. profit forecast to $1.11 per share from $1.32 per share and trimmed his price target to $11 from $14.
New York Times stock fell 91 cents, or 5.7 percent, to $15.19 in afternoon trading. The stock reached a new 52-week low of $15.12 earlier in the session. Shares of Sacramento. Calif.-based McClatchy shed 38 cents, or 3.5 percent, to $10.38. The stock hit a fresh low of $10.32 earlier.
Noto also dropped his Gannett Co. 2008 earnings prediction to $3.95 per share from $4.51 per share and slashed its price target to $38 from $46. The McLean, Va.-based company's stock declined $1.75, or 5.2 percent, to $32.09. It reached a new low of $31.97 earlier.
The analyst also cut profit forecasts and price targets on Dallas-based Belo Corp., Milwaukee-based Journal Communications Inc. and Cincinnati-based E.W. Scripps Co.
"There was a land of Publishers and Editors called the Newspaper Business... Here in this pretty world Journalism took its last bow... Here was the last ever to be seen of Reporters and their Enablers, of Anonymous Sources and of Stringers... Look for it only in books, for it is no more than a dream remembered. A Civilization Gone With the Wind..."
With apologies to Margaret Mitchell...
ping
How glad am I not to work at a newspaper? Anyone?
52-week lows? New York Times stock is trading at a 10+ year low; McClatchy looks to be at a 16-year low:
McClatchy bought Knight-Ridder (including my hometown rag, the Charlotte Observer) last year for more than the current total market cap of McClatchy.
Can you just imagine having a big chunk of your 401k in one of these losers? Not only is your job on borrowed time, but your retirement nest egg has had the yolk sucked out...
Pinch will be taking THE new york times private when the stock hits $5.
To go private, you would have to have a sugar daddy to fund the buyout or borrow a bunch of money. If he does try a buyout, it will be interesting to see who gags up the cash.
Gloating bump.
They would make more if they converted the news print paper to toilet paper.
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