Merrill Lynch Downgrades N.Y. Times, McClatchy and Lee
By Erina Lin, Monday 17 September 2007 at 22:46 :: Newspaper Data :: #570 :: rss
Merrill Lynch downgraded New York Times Co. and two other newspaper groups Monday, following a recent pattern for analysts covering the industry in a predicament.
Analyst Karl Choi lowered the rating on New York Times to "Sell" from "Neutral." Choi also made the same call for McClatchy Co. and Lee Enterprises Inc.
Newspapers have been in a tougher situation in recent months since online outlets and cable television continue to steal ad revenue from traditional media.
Last week, the New York Times revealed its overall ad revenue for its News Media Group, which includes its newspaper properties, fell 4.6 percent in August. This declining pattern has continued for more than a year, CNN Money reported.
The Newspaper Association of America reported an 8.6 percent drop in newspaper ad revenue for the period between April and June. Print-only advertising at newspapers fell 10.2 percent to $10.5 billion in the second quarter. It is the fifth consecutive quarter of declines, according to the industry group.
The Merrill downgrade comes after a "Neutral" call on the sector last week from Banc of America Securities. Goldman Sachs analysts lowered the Times and McClatchy to "Sell" in July. Lehman Brothers maintains an "Underweight," or "Sell" rating on the stocks and a "Negative" rating on the industry.
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