MILLER: POLITICAL SPENDING TO GIVE CBS A BOOST
Seeing CBS as a “true value play,” Bearn Stearns media analyst Victor Miller says the corporation will benefit this year from healthy political advertising revenues from its TV station division.
According to the Bear Stearns analysis, CBS will reap $116.1 million from the politicians this year, 16.1% more than in the 2004, despite the lack of a presidential contest this time around. “We think the stars may be aligned for CBS in terms of its Senate, House, gubernatorial and issue dollars,” the report says.
Based on stronger-than-expected revenue from the television division (stations and network) and other factors, Miller and company peg CBS stock at “outperform” and underpriced at $25.20. “We believe that CBS shares are worth $34.”
Overall, the analysis sees a decline in political spending compared to 2004—from $1.4 billion to $1.2 billion. None of the other station groups Bear Stearns examined comes close to CBS. Most will be down, it found, some considerably.
Just four other analyzed groups will post political gains this year, and of just 2.7%. They are New York Times, LIN, ABC and Meredith. All others will be down. Taking the big hits: Sinclair (-33%), Hearst-Argyle (-19.6%) and Belo (-19.6%).