After RAB’s report of July radio revenues declining 1% (9/17/07 RBR #181), Bank of America analyst Jonathan Jacoby is sticking with his estimate that Q3 will be flat. But he says he could be wrong – that it might not even be that good. "We are keeping our August revenue growth estimate at flat. Our September remains at positive 1%. Our checks indicate continued market softness, and we are beginning to hear of a soft start to the fourth quarter," Jacoby told clients in a research note.
The analyst says he remains neutral on the radio sector. There is, however, one stock that he recommends, only because it appears to be oversold. That is Radio One. "Simply put, the leverage concerns don’t justify the sell-off, in our view," Jacoby said. He notes that the company can sell more assets if it needs to and that any improvement in its Los Angeles ratings would boost his estimates for the group. "In addition, we do not believe the current price reflects any value for TV One," he added.