NEW YORK (
New York Times
shares fell after a UBS report warned of weak advertising market within the newspaper sector.
UBS analyst John Janedis initiated coverage of the Times with a sell rating. Janedis said that as the advertising model continues to shift with readers toward the Web and digital outlets, advertising revenue for most traditional newspapers will likely decline.
"We think the cyclical recovery in newspaper advertising has somewhat obscured the reality that in a more normalized ad environment, newspapers will still witness declines in ad growth," said Janedis. "With improvements in ad growth flattening, and likely reversing, we expect consensus estimates to move lower as the industry struggles to cut costs in an attempt to manage flat cash flow growth on an annual basis."
Janedis rated Gannett as a Hold, saying the company's stock is likely to "tread water."
opened at $8.35, 9 cents below yesterday's closing price of $8.44. Shares dropped to as low as $8.12 this morning, and are currently down almost 3.5% to $8.15.
are down about 3.2% to around $13.00.
-- Written by Theresa McCabe in Boston.
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