Influential Wall Street analyst and former Madison Avenue insider Brian Wieser initiated coverage of media and marketing research giant Nielsen with a “hold” rating and a year-end stock price target of $31 per share, giving it an equity valuation comparable to leading ad agency holding companies.
While some competitive risks exist on the horizon, Wieser, the senior research analyst at Pivotal Research Group, advises investors that Nielsen is positioned to continue gaining share of the global and U.S. media and marketing research industry, because of the role its core TV research services play as a “currency” for media buyers.
“Few buyers and sellers of advertising will transact the purchase or sale of advertising without Nielsen,” Wieser writes, adding, “This is unlikely to change, as Nielsen’s currency status means that for change to occur, a wide range of participants in the industry would have to independently and collectively conclude that there was another better and identical alternative.
“Such an outcome is possible, but highly unlikely for the foreseeable future. Nielsen benefits from this circumstance, as its customers generally become price takers and must pay significant annual rates of increase for like-for-like services. Because marketers have real budget constraints and multiple research service needs, Nielsen is thus well-positioned to grow by cross-selling and capturing a rising share of wallet from its media measurement clients.”