Gilford Securities analyst Jim Boyle raised his revenue estimates for Entercom Communications. That bullish report appeared to give a boost to a wide swath of radio stocks on Friday.
Boyle told clients in a research note that Q3 estimate revenue at Entercom is looking better than expected. “The late June “pause” and soft July appears to have been a temporary dip and not a trend, if August-September-Oct. pacings moderately hold. Recently, the August Radio industry rev. was +7% year-over-year compared to July’s +4%. More importantly, with September losing 700bps, sequentially vs. August comps, it would have superficially suggested that September Radio industry rev. could fall to low single digits given August rev. growth. Yet, anecdotal pacings indicate September is so far looking like August With a week to go, that might shift, but not a huge move. October pacings are estimated to be better than September, and that is before political,” Boyle wrote.
The analyst also noted that CBS Corporation had said during the week that its radio pacings were up in the high single digits. Like Entercom, CBS Radio is focused on big markets.
“Entercom, in the past, has outpaced peers due to its cluster managers,” Boyle stated. “In 2009 and 2008 Entercom topped peers by 300bps. If our industry 2010 (estimated) forecast of +5% occurs, our Entercom [estimate of] 5.7% growth may be conservative.”