By: Jennifer Saba
Banc of America Securities upgraded E.W. Scripps to “buy” from “neutral” based on the company’s growing Internet and cable properties.
“We believe [E.W. Scripps] has executed well on its various businesses, morphing into a mini-media conglomerate positioned well for the secular crossroads ahead,” said a note released today. Furthermore, the company is poised to grab more ad dollars shifting into cable and Internet.
Shopzilla is one reason why the research firm is bullish on Scripps. Shopzilla already outperforms peers such as Shopping.com (recently acquired by eBay) with over 100% revenue growth over each of the last three quarters versus about 30% for Shopping, according to Banc of America’s research.
Banc of America estimates that Scripps’ online properties will contribute roughly 25% of the company’s projected 4% to 6% ad growth next year.
Analysts wrote that Scripps has done a great job making smart investments in new media areas of growth. “In contrast,” said the note, “many other newspaper operators continue to make bets on their own businesses by buying back stock and levering up their balance sheets, which we view to be somewhat riskier given the secular shift out of print.”