By: E&P Staff Citigroup analyst Eileen Furukawa Tuesday upgraded Belo Corp. to "Buy" from "Hold," saying the Dallas-based company's TV properties are so undervalued the stock should appeal even to the most "anti-newspaper" investor.
Furukawa also raised her price target for Belo stock to $25 from $19.
At noon EDT Tuesday, Belo (BLC: NYSE) was trading at $21.61, up 99 cents or 4.8% on its opening.
Furukawa said Belo's "conglomerate discount" is too much on its television business. If Belo's 20-plus stations were valued at the same multiple as other TV companies, the corporation would be valued some 60% higher than its $2.26 billion market worth, the analyst suggested.
At its current stock price, Furukawa said, Belo is so cheap a buyer would effectively be getting for free its newspaper division, which publishes The Dallas Morning News and three other dailies.
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