By: A Deutsche Bank analyst cut his rating on shares of newspaper publisher The New York Times Co., as the industry continues to battle soft U.S. advertising trends.
New York Times is one of many media companies that have struggled with declining ad revenue as more consumers turn to the Internet for news and information.
Deutsche Bank's Paul Ginocchio cut his rating on the stock to "Sell" from "Hold" and lowered his price target to $15 from $17.
Ginocchio said advertising nationwide has softened, with fellow media company Meredith Corp. struggling as well. Ginocchio predicts national advertising will remain difficult for at least the first half of 2008.
"After a strong second half of 2007 by both Meredith and New York Times in national advertising, both are now seeing weaker 2008 trends," Ginocchio wrote in a client note.
Also, Ginocchio said shares have risen recently in anticipation of the company's annual shareholder meeting in April, but warned that shares may decline if efforts by investment firm Harbinger Capital fail.
Last week, Harbinger increased its stake in the company to 15.6 percent. The firm is seeking seats on the company's board, having previously said the board needed a new perspective.
[Goldman Sachs today said it was maintaining its "sell" rating on NYT Co. after reviewing valuation and the upcoming shareholder strife.]
Ginocchio said the share price "more than discounts" operational benefits that may arise from the election of new board members.
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