Citigroup analyst Leo Kulp has downgraded his rating for The New York Times Company’s stock from “Buy” to “Neutral,” saying that the gains in digital revenue aren’t enough to offset declining print ad sales. The bad news comes on the heels of the Times reporting a profit in the third quarter, and claiming that digital subscriptions were booming.
Kulp said those numbers simply aren’t big enough:
If a substantial number of those readers pay for digital subscriptions, Kulp estimates the total fees will increase the Times Co.’s earnings before interest, taxes, depreciation and amortization — a measure known as EBITDA — by $70 million to $75 million annually. Kulp thinks further print advertising declines could cost the Times Co. about $80 million in annual EBITDA.
As always, the Times is riding a wave. One day it’s up, the next it’s down. We long for the day when we can write the headline, “Everything Will Be Great at The New York Times Forever,” but that’s just not going to happen.