Barclays Capital ups U.S. ad forecast
Predicts increase of 3.5% to $167.6 billion this yearNEW YORK -- Barclays Capital on Thursday boosted its U.S. advertising forecast, making it one of Wall Street's biggest ad bulls. It also boosted its price targets on News Corp. and Viacom, saying they are the two stocks among entertainment biggies that investors can best use to play the expected ad upside.
Barclays now projects that U.S. advertising will increase 3.5% to $167.6 billion this year, compared with a previous estimate for flat spending compared with 2009.
"Our growth forecast is now Street-high," said analyst Anthony DiClemente in his report. "A recent mosaic of anecdotal data points paints an incrementally buoyant picture for U.S. advertising."
This is also due to even-year benefits from political advertising, the Olympics, and the soccer World Cup.
In conjunction with the higher ad forecast, DiClemente raised his price target on "overweight"-rated Viacom by $2 to $37 and on "equal weight"-rated News Corp. by $1 to $15.
Both have "significant ad exposure where Street expectations are currently most conservative," he said.
Here are DiClemente's 2010 ad spending forecasts for key media categories:
* national network TV (including Olympics and World cup): +7.8% vs. +4.5% prior
* national cable TV networks: +6.0% vs. +5.5% prior
* local TV broadcast: +5.0% vs. +3.0% prior
* Internet: +8.9% vs. +5.7% prior
* radio advertising: +2.2% vs. -4.0% prior