New York Times Stock Hits Lowest Price Since September 1997
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NEW YORK (AP) -- Shares of New York Times Co. touched their lowest point in more than a decade Wednesday, after an analyst cut his price target and predicted shares will weaken over time.
The stock lost 96 cents, or 6.4 percent, to $14.10 in late-afternoon trading. Earlier in the day, shares touched a low of $13.91, their lowest level since September 1997.
Lehman Brothers analyst Craig Huber cut his price target to $8 from $11, implying he expects the stock to drop 47 percent over Tuesday's close. He reiterated an "Underweight" rating, and said the company's dividend is at risk of being cut in coming years.
Due to increasing cyclical and secular pressures, newspaper advertising revenue will likely fall 11.1 percent in 2008, Huber said. He previously had expected a drop of 9.3 percent.
"New York Times shares should follow its weakening fundamentals over time," Huber said in a note to clients.
Potential asset sales -- the company owns newspapers in New England, among other properties -- are not a reason to own shares, he said.
Its new corporate headquarters building in Manhattan and its stake in the Boston Red Sox should be worth "significantly more" in five to 10 years, Huber said, so there likely won't be any "rush to sell these assets."
"Should the company choose to sell any assets of size and the stock move up on the news, we would advise investors sell into the strength," he said.
Huber said the company's 92-cents-per-share dividend is likely to be cut. "We think the company's dividend is at risk of being cut over the next few years and think the company would be much better served using the $133 million annually to instead pay down debt," he wrote.
So far this year, shares have lost 14 percent of their value.
A company representative was not immediately available for comment.
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First Posted: 07- 9-08 06:26 PM | Updated: 07-17-08 05:12 AM