Newspaper stocks got an early Christmas present in the form of a positive note from Wells Fargo analyst John Janedis, who upgraded Gannett (NYSE: GCI) and the NYTCo (NYSE: NYT) on an improved outlook for ad revenues. In his research note, Janedis raised Gannett to outperform from underperform, while the NYTCo’s stock was moved up to market-perform from underperform. As Janedis’ memo made the rounds, by mid-afternoon, Gannett’s stock gained nearly 6 percent to $15.27, as the NYTCo rose 8.6 percent to $11.98. Still, for other newspaper companies, the pre-Xmas boost appears short-lived. McClatchy (NYSE: MNI) benefited in the morning, rising $0.18 to $3.73, but by the midday, Sacramento-based publisher’s shares were stuck at $3.55.
In his analyst note, Janedis is clear that the advertising climate is only getting “less worse” for newspapers and that we are not witnessing a wholesale rebound. Still, newspapers’ collective ability to arrest the declines, particularly in the crucial month of December, has happened more quickly that previously expected. The way things are trending, Janedis is calling for a “high single-digit decline” in overall newspaper ad spending in 2010.
As for specific newspapers, Janedis sees growing strength at the WSJ and NYT. Both will likely see a 20 percent increase in ad revneue from October to December. Still, he expects ad spending for the month of December to be flat at the NYT, year-over-year. In Gannett’s case, Janedis projects 8.5 percent decline for 2010. Considering the double digit declines the McLean, VA-based publisher has seen over the past year, that number certainly sounds like good news heading into next year.
Did Janedis note this Wells’ role with Gannett? “Gannett Co., Inc. shares are traded on the New York Stock Exchange with the symbol GCI. The
company’s transfer agent and registrar is Wells Fargo Bank, N.A. General inquiries and requests
for enrollment materials for the programs described below should be directed to Wells Fargo
Shareowner Services, P.O. Box 64854, St. Paul, MN 55164-0854 or by telephone at 1-800-778-3299
or at http://www.wellsfargo.com/shareownerservices.”
Nice catch there Jilted. I find this to be incredible.
In terms of advertising, only two venues will matter going forward: out-of-home display advertising and Internet advertising.