Veteran broadcast analyst Jim Boyle is back on Wall Street, now working for Gilford Securities. With just a small portfolio of companies to follow thus far, he’s already given on of them an upgrade. Boyle raised Entercom from “hold” to “buy” based on improving radio ad sales.
Boyle noted that Q1 radio industry revenues were down 24% and Q2 22%, but with things picking up of late and early reports on September bookings looking better than expectations.
“There are early signs of the recession fading. Radio’s low cost and short schedules are useful for ad clients coming out of a recession that are still apprehensive about consumer rebound. We still question if the radio industry’s many years of struggling are mostly cyclical and might also fade or are likely long-term secular problems,” Boyle told clients.
As for Entercom in particular: “ETM’s revenue is likely to be off in the mid-teens yr/yr in 2009E and that is likely the low point. Investors have seen the stock go up 6x YTD. Which begs the question of how good, or how not as bad, will 2010E be for ETM’s top-line. Its CEO recently suggested the industry might grow revenue by double-digits against the very easy ’09 comps. Our increased revenue estimate moves to up 6.1% in ‘10E from 4.1%, which is still well below ETM’s hope,” wrote Boyle.
