Wedbush Downgrades Lamar Advertising (LAMR) to Underperform; Category Concerns
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Wedbush downgrades Lamar Advertising (Nasdaq: LAMR) from Neutral to Underperform. Price target increased from $20 to $26.
Wedbush analyst says, "We are concerned that large, economically sensitive local ad categories for LAMR like auto, retail and real estate (~25% of revenue) may not quickly boost billboard spending. More broadly, we believe outdoor will take longer to rebuild its base of local spending (which is ~80% of LAMR’s revenue), much from credit-tight small businesses, than more national media that can benefit from increased spending by rivals or for product launches. Our early checks on even national outdoor suggest a soft 1Q. LAMR’s growth out of the recession’s trough will be hampered by its exposure to particularly hard-hit local economies. We estimate that LAMR generates close to 20% of its revenue from California, Florida, Michigan, Arizona and Nevada, which have suffered more in the recession. As of August, the median unemployment in these states was 12.2% vs 9.7% for the U.S. and their median unemployment rate had increased y/y by 460bps, vs a 350bps increase for the U.S."
To see more analyst ratings on LAMR Click Here.
Lamar Advertising Company, together with its subsidiaries, provides outdoor advertising services in the United States, Canada, and Puerto Rico
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