UBS on Outdoor Advertising: Cautious on All Things Local
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Price: $110.91 +0.17%
Rating Summary:
5 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
5 Buy, 10 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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UBS on Outdoor Advertising: Cautious on All Things Local
UBS analyst says, "We are initiating coverage of the out-of-home sector with a cautious view - Our cautious view is driven by: 1) macro concerns, particularly on the local ad front, which accounts for ~70% of outdoor advertising; 2) increasing local market media fragmentation slowly taking share of outdoor advertising dollars and pressuring costs per thousand (CPMs), and 3) fears that digital is creating overcapacity in the industry."
"We rate Lamar (Nasdaq: LAMR) Sell with a $16 price target - Despite the 53% decline in LAMR shares year to date, we think there is further risk to the downside. We expect macroeconomic pressures, particularly for Lamar’s small, local customer base (80% of revenue), and local market media fragmentation to continue. Moreover, we think digital is creating overcapacity, particularly in Lamar’s smaller markets, which is weighing on occupancy and pricing."
"We rate Clear Channel Outdoor (NYSE: CCO) Neutral with an $11 price target - We prefer Clear Channel’s larger market exposure and more diversified national/ local revenue stream (40% national vs. 20% for LAMR). However, we think CCO also faces macro headwinds and increasing secular pressures, and believe the parent company’s leverage (10.7x at 6/30/11) and potential impact on CCO will remain an overhang for the near to intermediate term."
UBS analyst says, "We are initiating coverage of the out-of-home sector with a cautious view - Our cautious view is driven by: 1) macro concerns, particularly on the local ad front, which accounts for ~70% of outdoor advertising; 2) increasing local market media fragmentation slowly taking share of outdoor advertising dollars and pressuring costs per thousand (CPMs), and 3) fears that digital is creating overcapacity in the industry."
"We rate Lamar (Nasdaq: LAMR) Sell with a $16 price target - Despite the 53% decline in LAMR shares year to date, we think there is further risk to the downside. We expect macroeconomic pressures, particularly for Lamar’s small, local customer base (80% of revenue), and local market media fragmentation to continue. Moreover, we think digital is creating overcapacity, particularly in Lamar’s smaller markets, which is weighing on occupancy and pricing."
"We rate Clear Channel Outdoor (NYSE: CCO) Neutral with an $11 price target - We prefer Clear Channel’s larger market exposure and more diversified national/ local revenue stream (40% national vs. 20% for LAMR). However, we think CCO also faces macro headwinds and increasing secular pressures, and believe the parent company’s leverage (10.7x at 6/30/11) and potential impact on CCO will remain an overhang for the near to intermediate term."
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