Entercom A ‘Buy’ As KYW Bargaining Begins

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Is a late March swoon for Entercom shares the last time bargain-seekers will find the radio broadcasting company’s stock near $5.25?


That very well might be the case, thanks to the initiation of coverage by a California-based capital market company.

Or not. Entercom on Thursday began bargaining meetings with labor organization SAG-AFTRA regarding one of its all-News stations, and a fair contract is at the heart of what employees seek.

Yes, Entercom’s long-term shareholders are likely displeased with their investment. As Simply Wall St. noted late last week, if one were to have purchased ETM shares three years ago, they would have lost 42% of their value.

That’s certainly frustrating for the ETM shareholder who hasn’t bought or sold shares since 2016. For those seeking entry into ownership, now appears to be the best time to do so.

It is likely what motivated B. Riley Financial to commence new coverage of Entercom with a “Buy” rating.

B. Riley FBR analyst Zack Silver is the latest individual to go hot on Entercom, and set a target price of $7.75, implying upside of 25% from the company’s $6.21 close on Wednesday (4/17).

Although Entercom shares are off 39.4% over the last year, ETM is up 6.5% in the last 30 days. With shares up 2.1% as of 11:18am Thursday, to $6.34, Entercom is poised to finish at its highest price since late February.

To achieve Silver’s target price, Entercom will need to return to a price last seen in September 2018.

Once that is done, Entercom stock may be at a “new normal,” as the $7.75 target price is less than half of what ETM was valued on February 1, 2017.

Further, Silver’s initiation comes at the low end of the average 1-year target price for ETM of $8.75.

What happens now for Entercom on Wall Street could have much to do with what happens in the Cradle of Liberty. That’s because its Philadelphia all-News station acquired in its Reverse Morris Trust-fueled tax-free merger with CBS Radio, KYW-AM 1060, is in the midst of a Federal mediation session with SAG-AFTRA.

This is the first stage of labor negotiations for unionized KYW staff, and things could get contentious.

In a “statement of support,” Los Angeles-based SAG-AFTRA said its National Board was disappointed to learn during its April 13-14 plenary meeting “of the significant contract concessions proposed by Entercom for employees at some of the most successful and well-respected radio stations in the country.”

The Board “proudly stands” with its SAG-AFTRA colleagues who work for Entercom, and is “wholeheartedly behind their bargaining teams’ efforts to protect their working conditions while helping lead the digital revolution in radio.”

SAG-AFTRA continued, “When Entercom purchased the CBS Radio stations in 2017, it acquired a rich legacy with dedicated employees committed to their work and to being a part of the future of the radio industry. Now, nearly all SAG-AFTRA-represented Entercom radio stations are bargaining for the first time with their new employer. They deserve a fair contract.”

As of 11:30am Eastern Thursday, Entercom had not publicly commented on the matter.