Deutsche Bank downgrades McClatchy Company (NYSE: MNI) from Hold to Sell and lowers their price target from $9 to $5. The firm also lowers their 2Q EPS estimate from $0.25 to $0.23 and our FY08 EPS estimate from $1.13 to $0.87 "due to an increased forecast for the cost of newsprint and a lowered revenue expectation for 2H08."
In addition, the firm said, "MNI's 2008E EV/EBITDA multiple of 5.6x is slightly below the peer multiple at 6.2x. We believe MNII should trade at a meaningful discount to the group, given its relatively high leverage and larger market profile. At our target, MNI would trade at 5.2x, a more appropriate discount to the group. Our DCF derives a $5 value. We set our target at $5 to reflect both the fundamentals and the valuation drag from leverage."
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McClatchy dumped by Russell 1000 index
