Ahead of the Bell: Radio Stocks

Tony Wible said industry revenue will fall about 5 percent in 2008 as advertisers spend less, meanwhile companies face larger amounts of debt as interest rates rise and credit conditions remain difficult.

Wible thinks the sector's stocks are expensive and expects Wall Street to trim its targets. He downgraded Cox Radio Inc. and Entercom Communications Corp. to "Sell" from "Hold," lowering his price target on both companies, along with "Sell"-rated Citadel Broadcasting and "Hold"-rated Entravision Communications Corp.

The analyst said radio ad spending fell about 5 percent per month from January to May, and because radio is a "secondary media buy," the industry is likely to feel a strong impact from decreased advertising spending.

He maintained a "Hold" rating on Entravision because of its "compelling" long-term opportunities.

Wible cut his target on Bala Cynwyd, Pa.-based Entercom to $5 per share from $9.75, and his target on Atlanta-based Cox to $8.50 per share from $12.50. He reduced his target price for Entravision to $4.50 from $6.50 and his estimate for Citadel went to 50 cents per share from 75 cents.

Entercom and Cox Communications did not immediately return calls seeking comment.