Credit Suisse First Boston upgraded Media General (MEG ) to buy from hold.
On Wednesday the company upped its first quarter earnings per share guidance to about $0.20. Analyst William Drewry says the advertising cycle is starting to broadly turn upward, and Media General is well positioned to benefit from that. He notes that with almost one-third of revenue coming from television, Media General also is well positioned on the front-end of a recovery, with television currently showing stronger results than newspapers.
Drewry believes smaller cap newspaper stocks are benefiting from deregulation/consolidation speculation. He also thinks Media General's stock price looks very cheap on his current estimates relative to the group. He sees $0.20 first quarter EPS, and $2.17 for 2002, as well as $2.67 EPS for 2003.
Drewry has a $85 12-month target.