By: E&P Staff Despite two developments at Dow Jones on Monday (putting six community newspapers on the block and naming a new CFO), Goldman Sachs is not ready to change its negative ?sell? rating.
?While we like the aggressive approach CEO Rich Zannino has taken in both revamping the company?s management team and focusing on profit improvement, a challenging ad backdrop and a rich valuation are the basis for our sell rating,? analysts wrote in a note released today.
Dow Jones named Alcoa executive William Plummer as executive vice president and CFO, an ?unexpected? personnel change, according to Goldman Sachs. The research firm notes that Williams?s predecessor Chris Vieth, who is leaving the company, ?deserves significant credit for helping [Dow Jones?] cost-reduction efforts over the last several years.?
The six papers up for sale under the Ottaway community dailies group could help pay down debt as well and trim markets -- Danbury, Conn., Oneonta, N.Y., Plattsburg, N.Y., Santa Cruz, Calif., Sanbury, Pa., and Traverse City, Mich. -- that no longer have growth opportunities, analysts wrote.
Goldman thinks Dow Jones could fetch between $225 million to $275 million for the papers, or 9 times to 11 times EBITDA.
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