Citing two big challenges in Nielsen’s immediate future -- the “deceleration” of its marketing research business and the retirement of its CEO -- BMO Capital Markets has downgraded its rating for Nielsen’s stock to “market perform” from “outperform.”
The equities researchers also lowered its share price target to $24 from $38 due to lower estimates and a lower multiple versus its marketing information services peers.
While he did not downgrade Nielsen’s “buy” rating, Pivotal Research Group analyst Brian Wieser, revised his share price target to $27 from $35.
“While it’s difficult to look at these results or the company with any sort of optimism right now, we can’t discount the (still) relatively durable position Nielsen has in the market research industry and its capacity to produce meaningful cash flows, even if there are incremental risks through this year and probably next. The market reaction to today’s results were appropriate, but off a valuation base we thought already too low.”