Deutsche Bank Upgrades R.H. Donnelley (RHD) to Hold

September 26, 2008 11:02 AM EDT

Deutsche Bank upgrades R.H. Donnelley (NYSE: RHD) from Sell to Hold. Price target $2.

Deutsche analyst says, "We are upgrading RHD from Sell to Hold after giving more credit to cost cuts and the opportunity to make a dent in leverage by buying back bonds on the open market at significantly discounted prices. While we are still negative on incumbent YP publisher structural trends and see no near-term easing of the cyclical headwinds on SME spending, we think these two factors slightly extend the duration until more acute credit problems, and increase the shares' option value...Downside risks: inability to cut costs, ad sales trends not lessening in CY09. Upside risks: ad sales declines lessen in 2H08, RHD executes significant cost cuts without a negative impact on usage or sales, or RHD successfully restructures debt with limited dilution."

R.H. Donnelley Corporation published and distributed print directories that provide local information to consumers.

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