Lamar Shares Climb After Barclays Upgrade

NEW YORK (AP) — Shares of Lamar Advertising Co. traded higher Tuesday after Barclays Capital hiked its stock rating for the company, expecting a faster recovery than in past recessions.

Lamar, one of the largest billboard operators in the U.S., has taken three to six months to bounce back from previous downturns, Barclays analyst Anthony DiClemente said in a note to investors.

But shorter contracts, a growing share of the market and the adoption of digital outdoor ads could "quicken the recovery," he said.

He added that cost cutting is likely to drive up profit margins.

Meanwhile, Lamar faces none of the challenges that other advertising businesses — such as television or newspapers — face from changing technology, DiClemente said. In fact, digital billboards have proved more profitable for the company than its traditional business, he said.

DiClemente raised the stock to "Overweight" from "Equal Weight" and lifted his price target to $35 from $22. That price target implies upside of 37.4 percent from its closing price Monday of $25.47.

He expects Lamar, which is based in Baton Rouge, La., to post a loss of 45 cents per share in 2010. Analysts polled by Thomson Reuters expect a loss of 64 cents, on average.

Lamar shares rose $1.67, or 6.4 percent, to $27.11 in midday trading.