Analyst raises Saga estimates


Wells Fargo Securities analyst Marci Ryvicker liked what she heard from Saga Communications in Monday’s conference call. She’s now raised her 2009 and 2010 estimates for the broadcaster.

“Management echoed what other broadcasters have said – that ad rates are firming somewhat but visibility is still ‘cloudy.’ Even if rates do not tighten further, 2010 should be positive due to extremely easy comps,” Ryvicker said in a note to clients. “We currently anticipate that Saga will show 4% top line growth in 2010,” she said.

With the company reporting better than expected results for both radio and television for Q3, Ryvicker has revised upward her expectations for this year and the next. Specifically, Q3 revenues were down only 14% against her expectation of a 17% decline and EBITDA dropped only 17%, significantly better than the 31% decline she had been anticipating.

So, for full year 2009 the Wells Fargo analyst is expecting revenues to be down 14% (rather than 15%) to $120.1 million and EBITDA to decline 21% (rather than 24%) to $26 million. For 2010, she’s increased her revenue expectation slightly to $124.9 million, although that still works out to the same 4% increase, and she looks for EBITDA to be up 10% (rather than 8%) to $28.7 million.

Ryvicker maintains her valuation of $13-15 for the stock. Saga closed Monday at $12.07 after reporting its Q3 results.

RBR-TVBR observation: Yes, there are some other forecasters out there still expecting radio to be down in 2010, despite the very, very easy comps. We think they will come around in time.