UBS on Outdoor Advertising: Outdoor Industry Trends Stabilizing - Upgrading Lamar (LAMR)

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LAMR Hot Sheet

Rating Summary:
3 Buy, 10 Hold, 0 Sell

Rating Trend:

Up

Today's Overall Ratings:
Up: 19 | Down: 7 | New: 26

UBS on Outdoor Advertising: Outdoor Industry Trends Stabilizing

UBS analyst says, "We remain cautious on the outdoor industry over the LT. However, we are upgrading Lamar (Nasdaq: LAMR) from Sell to Neutral, as we no longer think there is near term downside earnings risk. Our Outdoor Advertising Survey results and recent conversations with other local advertising contacts, as well as incrementally more positive economic data over the past several weeks, suggest that local advertising in the near term (80% of outdoor) has likely bottomed."

"Making Small Changes to 4Q/ 2012 Estimates: We are making minor tweaks to our 4Q and 2012 estimates, assuming stronger organic revenue growth next year similar to growth in 2011. The organic growth increase for Clear Channel Outdoor (NYSE: CCO) is being offset by reduced F/X assumptions."

"Valuation: LAMR /CCO trading at 9.9x/ 8.5x ‘12E EBITDA: We are raising our PTs for LAMR and CCO to $28 and $13, respectively (vs. prior $18/ $11). Our PTs are based on 9.5x/8.5x our ‘12E EBITDA (vs. prior 8x/7.5x), and 12x/21x our ‘12E FCF/share."

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