Tuesday, April 1, 2008

Analyst reduces estimates for McClatchy... target price reduced from $6 to $5... says most expectations for McClatchy are "over optimistic"

More bad news for McClatchy. A Lehman Brother's analyst has reduced his estimate for the company, based on McClatchy's massive debt plus the on-going decline of newspaper business. NewRatings:

Analyst Craig A Huber of Lehman Brothers maintains his "underweight" rating on McClatchy Company (MNI), while reducing his estimates for the company. The target price has been reduced from $6 to $5.

In a research note published yesterday, the analyst mentions that the consensus expectations for the company and its peers appear to be overoptimistic. McClatchy is experiencing secular pressures and its debt load is one of the highest in the sector, the analyst says. The company should eliminate its dividend payments, currently $59 million, and use its cash to repay debt, Lehman Brothers believes. The EPS estimates for 2008 and 2009 have been reduced from $1.00 to $0.90 and from $0.85 to $0.80, respectively.