Boyle cuts radio estimates...again
Seeing nothing to improve radio ad sales in the near future, Wachovia Securities analyst Jim Boyle has once again cut his Q4 estimates for radio companies. "Business is not significantly or consistently improving," he told clients in a note. In the long-term, he thinks that efforts by Clear Channel and others to cut inventory and boost prices could bear fruit - - but not until at least Q2 of 2005. For now, he notes, "Ad rate-cutting hasn't gone away, but it hasn't deteriorated either. As long as the largest groups are cutting cost-per-points and inflating inventory to offset such action, any modest, percolating demand merely gets sponged up in the near term." So, Boyle has cut his Q4 revenue estimates dramatically for 10 of the 11 radio companies that he follows (all except Emmis). But he still thinks there are a couple of stocks worth buying. He thinks niche players like Radio One and Univision should trade at a premium to other radio stocks because of their better growth prospects. Univision does trade a premium, but he says it should be bigger, and Radio One actually trades at a discount to the group.
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Jim Boyle's Q4 radio revenue growth estimates
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Company
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New
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Univision
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10.0%
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12.5%
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Entravision
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7.0%
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8.0%
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Radio One
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6.0%
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9.0%
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Entercom
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3.5%
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6.0%
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Citadel
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3.0%
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5.7%
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Cumulus
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3.0%
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5.4%
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Regent
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3.0%
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6.0%
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Saga
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3.0%
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6.5%
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Emmis*
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2.8%
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2.8%
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Clear Channel
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2.5%
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6.5%
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Cox Radio
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2.5%
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4.4%
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*fiscal Q3 for Emmis
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Source: Wachovia Securities
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