Morgan Stanley lowers earnings targets for UK newspapers
By Leah McBride Mensching, Wednesday 26 September 2007 at 22:41 :: Newspaper Data :: #619 :: rss
Financial services firm Morgan Stanley has cut its earnings targets for three of the United Kingdom's top newspaper publishers to reflect the industry's expected dip in advertising revenues next year, the investment bank said Wednesday.
Morgan Stanley has lowered its earnings per share (EPS) forecast on Daily Mail & General Trust by 7 percent, and target valuation by 6 percent to 780 pence. The bank lowered Trinity Mirror's EPS expectations by 1 percent, with a 4 percent cut to its target valuation, to 505 pence. The EPS forecast for Johnston Press was cut by 4.5 percent, with a target valuation deduction of 9 percent, to 425 pence, Reuters reported Wednesday.
“We believe key lead indicators such as retail sales, (gross domestic product), job vacancies and consumer confidence have recently worsened. We now expect UK newspaper advertising to fall 2 percent in 2008 (from +2 percent previously),” the bank stated in a UK newspaper industry research note, according to Reuters.
The changes were made after the sector's valuations fell about 16 percent in the past three months to all-time lows, Morgan Stanley said.
However, the bank stated, UK newspaper publishers have been trading well, as national advertising returned to growth, causing regional trends to stabilise, with 2007 forecasts up 4 percent since January, Reuters reported.
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