Lamar Advertising rises as analyst upgrades co.
NEW YORK (AP) — Shares of Lamar Advertising rose to their highest level in more than a year on Monday as an analyst lifted his rating and price target for the billboard and outdoor advertising company on the likelihood that it will convert to a real estate investment trust.
REITs must pay out annually at least 90 percent of their taxable income to shareholders in the form of dividends.
Morgan Stanley's Benjamin Swinburne said in a client note that if Lamar converts to a REIT it would realize tax savings. While the company has not yet received a ruling from the Internal Revenue Service as to whether it qualifies for REIT status or not, Swinburne believes it is highly likely that the company will qualify, based his interpretation of previous rulings and recent commentary made by Lamar.
The analyst raised Lamar's rating to "Overweight" from "Hold" and boosted its price target to $46 from $31.
Last month the Baton Rouge, La., company reported that its second-quarter net income and revenue climbed. Its results were in line with analysts' expectations.
Lamar operates billboards and other outdoor advertising in 44 states, Canada and Puerto Rico, as well as a logo business in 22 states and Canada. It also has 60 transit advertising franchises in the U.S., Canada and Puerto Rico that place ads on buses and bus shelters.
Lamar Advertising Co.'s stock gained 49 cents to $37.01 in afternoon trading. The shares reached $37.75 earlier in the session, their highest point since March 2011.