Friday October 10, 09:55 AM
STOCKS NEWS EUROPE-Daily Mail up; UBS raises target
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07:55GMT 10Oct2008-Daily Mail (LSE: DMGT.L - news) up; UBS (Virt-X: UBSN.VX - news) raises target
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Shares in Daily Mail & General Trust (DMGT) are up 2.8 percent as selected media issues buck the market slump on some bottom fishing in volatile market conditions with DMGT helped by a hike in price target by UBS to 350 pence from 330.
In a cautious revue of the UK newspapers sector, UBS cuts its newspaper advertising growth forecast to minus 15 percent from minus 12 percent for 2008 and to minus 10 percent from minus 6 percent for 2009 to reflect a deteriorating macro economic outlook.
The broker says this has led it to its earnings estimates for DMGT by 14 percent longer-term.
However, UBS says it has increased its target price slightly to the middle of its new discounted cashflow/sum-of-the-parts-based valuation range, to reflect its relative preference for DMGT within the sub-sector.
UBS says this reflects the quality of DMGT's national newspaper assets and the profit contribution of non-structurally challenged Business2Business assets.
The broker retains its 'neutral' stance on DMGT.
In the sector, UBS also cuts its EPS estimates for Johnson Press and Trinity Mirror (LSE: TNI.L - news) , reducing target prices for both to 40 pence from 50 pence and 60 pence from 70 pence respectively.
Shares in Trinity Mirror up 0.7 percent, while Johnson Press outperforms, add 20 percent having led the sector lower over the past year.
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