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‘A Relatively Brightening Position’

Boyle’s analysis of Entercom reflects an industry that is ‘rebounding moderately’

We’ve been hearing more positive analysis, or at least less distressing analysis, from some Wall Streeters of late.

Representative are the latest comments from analyst Jim Boyle of Gilford Securities about Entercom Communications. He writes to investors that he has upgraded his recommendation about Entercom’s stock to a “buy.” He said the company’s radio business got healthier in September and that the general economic “revival” bolsters its improvement.

Entercom has 111 stations in 23 big and medium markets. One reason the company is notable is that it is one of the largest “pure play” radio groups and thus seen as an industry barometer.

About Entercom’s business in September, Boyle wrote that early sales bookings were ahead of expectations. “It appears more and wider bright spots are perking up.”

“There are early signs of the recession fading,” Boyle continued. “Radio’s low cost and short schedules are useful for ad clients coming out of a recession that are still apprehensive about consumer rebound.” However, he said, “We still question if the radio industry’s many years of struggling are mostly cyclical and might also fade or are likely long-term secular problems.”

He thinks Entercom’s revenue will be down in the mid-teens this year compared to last, though 2009 is “likely the low point.” Entercom’s CEO, Boyle noted, recently suggested the industry might increase its revenue by double digits next year over weak 2009 figures. Boyle himself thinks Entercom will see a 6.1% rise in revenue then.

Both Entercom and the industry, Boyle thinks, could “potentially surprise” investors pleasantly after lengthy struggles and very low expectations, though plenty of negatives and risks remain for both the company and radio at large.

Boyle concluded by describing radio as being in a “relatively brightening position, post-recession and currently.”

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