CBS shares hit six-year low after Goldman Sachs reiterates sell rating

NEW YORK, Apr 14, 2008 (Thomson Financial via COMTEX) -- CBS/A | news | PowerRating | PR Charts -- Shares of CBS Corp. fell to their lowest price in more than six years on Monday after Goldman Sachs reiterated its sell rating on the company, saying it felt that it had "encountered a worsening of both macro and audience trends" during its first quarter.

The firm wrote the shares had "limited appreciation potential" to its six-month price target of $22.50, which was maintained.

Goldman said that radio and television stations would be hurt by a pullback in advertising spending in such key categories as automobiles. It also speculated that the writer's strike had "exacerbated below-peer ratings trends at the network and stations."

"We do not expect local advertising trends ex-political to improve during the second-quarter and read its continued deterioration as an early sign that pressure on the national ad market should soon follow," it said. The firm added, "we believe the recession should only exacerbate the secular concerns regarding traditional media businesses, leading to downward Street estimate revisions and pressuring CBS shares."

Goldman forecast first-quarter earnings of 35 cents a share on revenue of $3.5 billion for CBS. The mean estimate of analysts polled by Thomson Financial is for 33 cents a share in earnings and revenue of $3.56 billion.

Shares of CBS fell 1.6% to $21.05 on Monday on heavy volume. Earlier in the session the shares fell to $20.97, their lowest price since September 2001. Ryan Vlastelica rv/pc

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