Goldman Sachs Downgrades CTC Media (CTCM) to Sell

Goldman Sachs downgraded CTC Media (NASDAQ: CTCM) from Neutral to Sell with a price target of $3.00 (from $6.10). Analyst Alexander Balakhnin thinks the company will be hit hard by a 20% decline in the Russian TV ad market and FX-driven cost inflation.

"The Russian macro outlook remains highly uncertain, which, together with continuing devaluation of the ruble (our economists expect a ruble/US$ exchange rate of 70 for the next three months), hurts Russian TV ad market growth. Hence, we cut our TV ad market growth expectations and now forecast a 20% yoy TV ad market decline FY2015 (from -2.0% expected previously). Also, we expect CTC Media to be hit hard by the forecast ruble devaluation, given the direct linkage of its cost base to FX dynamics. We estimate 20% of programming expenses will face direct FX inflation, while some of the costs should be offset through cheaper Russian content. As we see 37% downside to our price target, we downgrade CTC Media to Sell, from Neutral, and add it to the CEEMEA Focus list," sadi Balakhnin.

For an analyst ratings summary and ratings history on CTC Media click here. For more ratings news on CTC Media click here.

Shares of CTC Media closed at $4.75 yesterday.

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