Meredith shares rise as analysts upgrades stock, citing improved advertising trends

Meredith shares up on improved advertising trends

PHILADELPHIA — Shares of Meredith Corp. rose Thursday after an analyst raised his rating on the stock on the belief that advertising revenue for its magazines and TV stations is improving.

Benchmark analyst Ed Atorino bumped up his rating on Meredith to “buy” from “hold” and increased his price target by $4 to $40.

He said Meredith’s TV ad revenue for the third quarter might come in better than expected as the advertising market improves, especially from automakers. Atorino noted that TV station owner Belo Corp. has seen these trends in the first quarter.

The Super Bowl airing on six of Meredith’s six CBS affiliate stations should also lift results, the analyst said.

Atorino said 2009 ad revenue for Meredith’s major magazines, which include women’s magazines such as Ladies’ Home Journal, rose by 7 percent compared with an 18 percent decline for the industry, citing Publishers Information Bureau data. He thinks Meredith’s magazines will continue to outpace its rivals. Circulation also improved.

He expects Meredith to raise its third quarter and 2010 outlook. Atorino also increased his third-quarter revenue forecast to $347 million from $335 million and earnings by a penny to 61 cents per share.

Shares of Meredith, based in Des Moines, Iowa, rose up 95 cents, or 3 percent, to close Thursday at $32.58.