Late Monday the Sacramento, Calif.-based-based publisher of The Miami Herald, The Sacramento Bee and other newspapers, said its revenue slipped almost 12 percent last month on declining ad sales, with particular softness in California and Florida.McClatchy shares closed at $8.91 on Tuesday. To put that into perspective the company's stock traded above $44 in October of 2006. Imagine losing 81% of your wealth in a year and a half. Ouch
Goldman Sachs analyst Peter Appert said McClatchy's 2008 ad sales are coming in below expectations so far.
"As a pure-play publisher in an exceptionally challenging industry with greater exposure to particularly troubled markets, McClatchy has a fundamental story that remains extremely challenging, in our view, and we continue to recommend that investors sell the shares," he wrote in a client note.
The analyst lowered his price target to $8 from $11 and cut his 2008 profit forecast to $1.11 per share from $1.20 per share. He also trimmed forecasts for 2009 and 2010.