As we speak, New York Times company stock is at $13.72, its lowest level since October 1998.
Times stock fell 7 percent yesterday, and it’s down another 2 percent today after Lehman Brothers analyst Craig Huber wrote in a note to clients yesterday predicting that Times stock would only continue to fall. He cut his price target for the stock to $8 from $11 and wrote, “New York Times shares should follow its weakening fundamentals over time.” That’s because everything in the world of newspapers is tanking:
Ad revenue at the flagship New York Times likely will drop 9.1 percent this year, more than the 7.2 percent previously projected, Huber said. Ad sales next year probably will fall 7.5 percent, compared with his earlier estimate of 6 percent.
He suggested they lower their debt:
The New York Times is better off in the long-term paying down debt instead of maintaining its yearly dividend, which costs the company $133 million annually, Huber said in his note. The company has about $1.05 billion of debt, wrote Huber, who declined to comment for this story.
“We continue to think the board and management would think long and hard about selling assets and repurchasing shares again until it gets a much better handle on where the fundamentals of the newspaper industry are going,” Huber wrote. “The prudent thing to do would be to pay down debt and continue to evaluate the landscape for Internet acquisitions.”