A light or just more tunnel?
Two more Wall Street analysts have weighed in with their views of the outlook for radio - - and they offer somewhat different perspectives. Lehman Brothers analyst Bill Meyers has cut his 2005 forecast, seeing no catalysts for growth. But at Banc of America Securities, Jonathan Jacoby notes pacing improvements in October and November and wonders whether this is the first sign of hope.
Not that Jacoby is beating the drum to buy radio stocks. He's actually lowered his Q4 radio growth estimate to 2.5%% from 4.5%. But he notes that his estimate is still higher than some of his peers. "We are concerned that 2005 expectations are still too high," Jacoby warned. He's keeping his full year 2005 growth estimate at 3.5%. He thinks Clear Channel's "Less is More" initiative could hold down growth in early 2005.
Back to the good news - - Jacoby says national spot pacings for October appear to have improved, while still negative, to -2.6% from -10.3% three weeks ago. Likewise, November has improved to -0.4% from -7%. That could indicate an improving trend - - maybe. "We caution that this datapoint could be another head fake and remain on the sidelines," he said, rather than recommending that clients jump in and buy.
Meanwhile at Lehman Brothers, Meyers has reduced his 2005 growth estimate for radio revenues to 2% from his previous 4.5%. "Absent catalysts, we expect nominal revenues to grow slower in 2005 than in 2004," he told clients. "First, the industry will not benefit from political spending (as it did in 2004). Second, growth of consumer spending is expected to moderate in 2005. third, inflation is expected to moderate in 2005. Under this scenario, the arguable presence of 'easy comps' is simply not enough to propel growth," he said.
Are you reading this from a forwarded email?
