From Standard & Poor's Equity Research
Prudential upgraded Tribune (TRB
) to overweight from neutral, explaining that the company plans to buy back up to 75 million shares.
Analyst Steven Barlow says that besides the share buyback, the company has targeted $500 million in asset sales and $200 million in cost savings. He notes that for 2006, the company is forecasting flat publishing expenses and flat broadcasting expenses, excluding programming costs. He says the company is benefiting from a number of cost-cutting steps undertaken in 2005, which should allow for improved operating leverage. He adds that the company will have 16 stations affiliated with its new CW network, which is projected to launch in September. He expects the new CW network to have better ratings vs. the WB network. He sees $2.06 2006 earnings per share (EPS) and $2.16 in 2007. He also has a $37 stock price target.