Schibsted's Financial Targets `Too Conservative,' Nordea Markets Reports

Schibsted ASA (SCH)’s sales and growth targets, set six months ago, are “too conservative,” Nordea Markets wrote in a note after Norway’s biggest media company said advertising was picking up.

“Schibsted was extremely confident” at a Stockholm presentation for investors yesterday, Tore Oestby, an analyst at Nordea, which hosted the event, said in an e-mailed note. “Its financial targets seem too conservative and should have been higher if they were set now.”

Schibsted Chief Financial Officer Trond Berger said yesterday a “strong” development for online classifieds is continuing this year, and advertising in printed newspapers has “positive” momentum, according to Oestby’s note published today. Schibsted, based in Oslo, said Sept. 22 that it expects a margin for earnings before interest, tax and amortization of 10 percent to 12 percent for the coming three to five years, and expects growth in operating revenue of about 5 percent.

Nordea estimates revenue growth of 5.4 percent for 2011 and an Ebita margin of 14 percent. The company will be debt free by the end of 2012 or early 2013, “unless it increases dividends significantly,” Oestby said. Schibsted’s net interest bearing debt was 1.82 billion kroner ($326 million) last year.

“Schibsted has an excellent market position to benefit from the cyclical uptick in demand and structural shift to online,” Oslo-based Oestby said, recommending investors buy the shares.

Schibsted’s stock is unchanged this year, after jumping 32 percent last year and almost doubling in 2009.

To contact the reporter on this story: Meera Bhatia in Oslo at mbhatia2@bloomberg.net.

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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