By: Morgan Stanley downgraded the New York Times Co. on Thursday because of weak revenue trends and the likelihood that the newspaper publisher would NOT be sold.
New York Times shares lost 38 cents at $24.15 in premarket trading.
Analyst Lisa N. Monaco downgraded the shares to "Underweight" from "Equal Weight," expecting the company's stock to underperform versus others in the newspaper sector.
"New York Times's numbers, particularly at The Boston Globe, are likely to continue to lag its peers, given the company's larger market exposure, dependency on movie studio advertising, and the impact of the Federated/May merger," Monaco wrote in a client note.
Federated, owner of Macy's and Bloomingdale's, acquired rival May Department Stores Co. in 2005.
Monaco also said a sale of the company is "implausible," saying the Ochs-Sulzberger family has expressed little interest in selling.
UBS Investment Research analyst Brian S. Shipman, kept a "Neutral" rating on the shares, expecting the Times' ownership structure to be maintained.
On Wednesday, a leading Times shareholder submitted a proposal that would diminish the Sulzberg family's control of the company by altering its voting system.
"We do not expect the Times' directors will change the structure, as it would effectively remove family control of the company," Shipman wrote in a client note.
Shipman also said the company's operating fundamentals remain weak, noting soft advertising sales in the company's third-quarter results.
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