…but it's not getting any better either. Lehman Brothers analyst Anthony DiClemente is sticking with his prediction that radio revenues will be down about 1% for 2007. And if radio stocks look cheap compared to where they used to be, he thinks they're about 15% overvalued.
"The two key themes driving our cautious outlook for the sector in 2007 are 1) continued lack of pricing power; and 2) the continued shift in media budgets towards new media alternatives," the analyst said in a note to clients. "Generally, while 2007 year to date has not worsened relative to our earlier expectations, driven in part by new business from the telecommunications sector, we are still forecasting nearly a 1% decline in radio industry revenues year over year. This decline combined with nominal expense growth for the industry of 3%-4% is expected to drive persistent EBITDA declines experienced by many of the radio broadcasters in the first quarter," DiClemente warned.