Analyst downbeat on radio sector
EmptySome radio stocks came under pressure Tuesday after Citigroup analyst Eileen Furukawa said in a report that "over-the-top optimism over potential leveraged buyouts and growth creates downside risk" after the radio sector "has rallied 20% since August."
She said: "We don't expect a flood of LBOs and think 2007 recovery will be more muted than fourth-quarter guidance suggests, and think increased radio assets for sale creates an overhang risk for 'would be buyers'."
As a result of this and share prices above her latest targets, she downgraded her stock recommendation on potential buyers Cox Radio and Cumulus Media to a "sell." Cox Radio shares closed down 2.5% at $15.93. Cumulus shares fell 3.9% to $10.09.