Gilford Securities Sees 3.5% Growth For Radio in 2011
July 9, 2010 at 7:54 AM (PT)
GILFORD SECURITIES analyst JIM BOYLE notes "even as Radio industry revenue growth has revived, the new mounting debate is what of 2011 revenue growth, or lack thereof? Radio stocks have dropped considerably over several weeks as the economic rebound has flagged and we get closer to 2011 when next year’s revenue will no longer have historically very easy comps to mathematically bolster year to year revenue growth."
GILFORD asked leading Radio executives, both public and private companies in the top 20 groups, "what would be their 2011 forecast if 2010 Radio revenue increased 5%-6%? The respondents account for roughly a third of the top 20 groups’ share of total industry revenue so the sample is representative, in my view. Two-thirds of sample’s revenue is from publicly-traded radio groups and one-third is from large private radio station groups."
The forecast was for "3.5% Radio revenue growth in 2011, presuming the economy does not tank. Hence, even with the very easy comps from 2009, which have largely fueled 2010's revival to date, that 'flip over' in 2011 and become a mathematical headwind rather than the previous very strong tailwind -- the Radio executives see lesser growth in 2011 than in 2010, but do not forecast revenue falling back to flat or negative -- which is what the bearish, prevailing sentiment seems among investors," added BOYLE. "Ironically, I had expected the public CEOs to be typically more optimistic than the several private CEOs in their 2011 forecast as private groups do not have a stock price to defend or investor perception to be spun. It was the opposite as public execs forecast an average 3% Radio revenue growth in 2011E whereas the private execs, with no axe to grind, forecast a higher 4.7% growth."