CTC Rises to 3-Month High on Economy to Boost Advertising
The company gained 3.5 percent to $11.10 in New York today, its highest close since Nov. 7, and was the third-biggest gainer on the Bloomberg Russia-US 14 Index of Russian companies traded in the U.S. this week, adding 5.5 percent.
The world’s largest energy exporting economy grew faster than economists predicted last year, expanding 4.3 percent, Russia’s Federal Statistics Service said on Jan. 31. Officials may revise the figure to as much as 4.5 percent or more, Deputy Economy Minister Andrei Klepach said this week. Urals crude, Russia’s main export blend, averaged $109 a barrel in 2011, 40 percent more than $78 in the previous year.
The better growth number “signals that prices for television advertising may increase in the second quarter,” said Anastasia Obukhova, an analyst in Moscow at VTB Capital, the investment banking arm of Russia’s second-largest bank. Advertising is the main source of revenue for CTC Media, said Obukhova, who rates the stock a “buy” with a target price of $24 per share.
Russia’s gross domestic product is expected to rise 3.5 percent this year and 3.7 percent in 2013, according to the median estimates of 17 economists in a Bloomberg survey. The prospect for continued expansion “spells a positive outlook for advertising revenue,” said Konstantin Chernyshev, head of research at brokerage UralSib Financial Corp. in Moscow.
Chernyshev rates CTC Media a “buy” with a target price at $16 per share, according to data compiled by Bloomberg.
To contact the editor responsible for this story: Emma O’Brien at Eobrien6@bloomberg.net