Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

We have maintained our long-term Neutral recommendation on leading media and marketing company, Meredith Corporation (MDP - Analyst Report), with a target price of $38.00, following its second-quarter fiscal 2013 results.

Why Neutral?

Meredith posted better-than-expected bottom line results for the second-quarter of fiscal 2013. The quarterly earnings of 89 cents a share came a penny ahead of the Zacks Consensus Estimate and jumped 27% year over year, owing to strong advertising revenues along with increased readership.

Total revenue strengthened 10% year over year to $360.6 million. However, it fell short of the Zacks Consensus Estimate of $373 million.

Meredith has been constantly endeavoring to explore and add alternative revenue generating channels through acquisitions or strategic alliances. The company’s efforts are paying off as it marked an improvement in other revenues on account of higher retransmission revenues during the first half of fiscal 2013.

The company also renewed its long-term affiliation agreements with CBS Corporation (CBS - Analyst Report) and News Corp.’s (NWSA - Analyst Report) Fox Broadcasting Co. Alongside, Meredith is aggressively expanding its brands through online platforms, televisions, videos, mobile applications, and broadening its reach of food and lifestyle content.

Despite these measures, our primary concern remains the fact that the company generates more than half of its revenue through advertising, which in turn depends upon the health of the economy. The company’s National Media Group and Local Media Group’s revenue remain susceptible to changes in advertising demand with nearly 90% of Local Media Group’s revenue coming from advertising.

Currently, shares of Meredith retain a Zacks Rank #2 (Buy) as it continues to focus on bolstering advertising revenue, primarily in the digital space and enhancing online consumer transactions, especially magazine subscription orders. Moreover, the company’s focus on brand licensing, marketing services and e-Commerce is expected to drive revenues.

Other Stock to Consider

Besides Meredith, Reed Elsevier plc (RUK - Snapshot Report), which holds a Zacks Rank #2 (Buy), is another media and marketing company worth considering in the near term.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%