Schibsted ASA fell to its lowest level in six weeks after Handelsbanken AB recommended that clients reduce their holdings as a decline in print advertising threatens earnings at Norway’s largest media company.
The stock fell as much as 1.9 percent to 232 kroner, the lowest level since Dec. 10, and traded 0.6 percent lower at 234.9 kroner as of 12:25 p.m. in Oslo.
The decline added to a 2.5 percent slide yesterday, after Handelsbanken lowered its price estimate on Schibsted to 237 kroner from 248 kroner and cut its recommendation on the stock to reduce from accumulate. Print advertising fell 14 percent in Norway last year and slipped more than 20 percent in October and November in Sweden, Handelsbanken analyst Rasmus Engberg said in a note to clients.
The Norwegian company is expanding its online business as newspaper circulation declines as readers increasingly forgo traditional print media. Its web-based operations, which include Leboncoin.fr, a classifieds business that’s one of France’s 10 most-visited websites, contributed 42 percent of third-quarter revenue, up from 36 percent a year earlier, it said on Nov. 7.
Earnings before interest, taxes, depreciation and amortization, excluding new ventures, may have fallen in the fourth quarter for the first time since the second quarter of 2009, Engberg said. Growth is set to continue in classifieds for the Oslo-based company, although at a somewhat slower pace, he said.
“Schibsted’s earnings forecasts have declined since mid-2012, yet the share has rallied,” Engberg said. “At some point, the multiple expansion will end.”
Schibsted shares have risen 27 percent since the beginning of August. “We see this share-price rebound as justified, but the trends in the fourth quarter do not seem to us to be the ticket that will take this further,” Engberg said.
Schibsted, which owns Aftenposten, Norway’s largest newspaper, and Swedish tabloid Aftonbladet, plans to spend 500 million kroner to increase revenues as it tries to replicate the success of its Finn.no, Blocket.se and Leboncoin.fr websites in nations including Malaysia and Brazil.