Prime Media Group Limited

( ASX:PRT ) - Media & Entertainment


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Prime Media Group, a major regional TV group, saw its shares slide more than 7% to 31 cents at the close yesterday in the wake of an earnings downgrade for the year to June 30. At one stage the shares were down 10% at 30 cents, a decade low.

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Analyst Views

PRT – Macquarie rates the stock as Upgrade to Neutral

Five months ago, Macquarie slashed earnings forecasts and pulled back its recommendation to Underperform as the recovery in earnings was likely to occur at a slower pace. As the analysts started to look ahead of the upcoming FY10 release, they discovered a different dynamic. All of a sudden, earnings forecasts were found as probably too low, so they have been raised. FY10 EPS estimate lifted by 13%, FY11 increased by 2%.

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PRT – Deutsche Bank rates the stock as Sell

The company intends to raise up to a combined $110m at 48c per share through a 10 for 7 renounceable offer raising up to $88 million and a placement to major shareholder Seven ((SEV)) raising approximately $22m. While the broker notes the raising reduces the risk of a covenant breach, it also comes at a price, with estimated FY10 EPS dilution of up to 54% in the event that the full $110m is raised. Sector: Media.

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