• Advertising Age, Tuesday, January 27, 2009 9:16 AM

Bernstein Research has downgraded CBS' stocks to "underperform" in anticipation that the company will have to cut its dividend in order to conserve cash and keep up its credit rating. Bernstein reduced its 12-month price target from $8 to $6 a share.

"Local ad trends continue to shock us with unimaginable rates of decline," says Bernstein media analyst Michael Nathanson in a research note. CBS has long reaped strong cash flow from its local ad businesses such as TV, radio and outdoor, but those have been hit hard in the current economic downturn.

In 2009 Nathanson expects non-political revenue at CBS' television stations to fall 15%; radio revenue to fall 25%; and North American outdoor revenue to fall by 10%. He anticipates that revenue at the CBS network will drop 6%.

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