Wachovia: Radio's Heading For A 13% Decline In 2009
January 7, 2009 at 5:20 AM (PT)
2009 apparently hasn't turned the corner on 2008 -- at least according to WACHOVIA broadcast analyst MARCI RYVICKER, who said in a client newsletter,"Radio has, in our view, hit bottom given the various penny stocks, significant debt levels, nonexistent credit and significant revenue and EBITDA declines. Unfortunately, however, we see no catalyst that will favorably boost the stocks until an economic and/or credit market recovery ensues."
RYVICKER is forecasting industry revenue to decline by 13% in 2009, and says even this number may be too optimistic. "There may be a smaller number of public radio groups given the real potential for delisting and bankruptcies. We reduced our 2009 radio revenue growth estimates by an average of 460bps and our EBITDA growth estimates by an average of 1,300 bps."
We see no catalyst that will favorably boost the stocks until an economic and/or credit market recovery ensues.
WACHOVIA expects EMMIS COMMUNICATIONS and SAGA COMMUNICATIONS to have the best 2009, with high single digit revenue declines vs. the double digit declines it anticipates for the rest of the groups.