We maintain our Neutral recommendation on
) with a target price of $35.00, as the company's dependency on
traditional advertising remains an inherent risk to its
However, it is encouraging to observe that Meredith has been
working diligently to explore and add alternative revenue
generating opportunities in order to reduce its dependency on
traditional advertising by entering into strategic alliances.
These include expansion of its integrated marketing offers, video
related operations, brand licensing, and mobile initiatives.
Moreover, the company has been taking initiatives to enhance
its online presence through the acquisition of online marketing
firms - Genex, New Media Strategies, and Healia, and a mobile
marketing firm - The Hyperfactory. Meredith also launched
Meredith Women's Network, largely covering women-related
Meredith remains committed to making strategic investments to
increase its revenue generating capabilities and in turn enhance
its profitability. The company is aggressively expanding its
brands through online platforms, televisions, videos and is
expanding its reach of food and lifestyle content across tablet
products, such as the iPad, NOOK Color, Kindle Fire and Samsung
However, more than half of the company's revenue is derived
from advertising, which in turn depends upon the health of the
economy. The company's National Media Group and Local Media
Group's revenue remain prone to changes in advertising demand.
Further, the company has been facing stiff competition across
its magazine, books and related publishing products as well as at
its television and radio stations with other mass media,
including the Internet and other broadcasting stations. The
competition mostly affects advertising rates, circulation levels
and reader demographics and is expected to weigh upon the
company's top and bottom line results.
Currently, Meredith, which competes with
Martha Stewart Living Omnimedia Inc
), holds a Zacks #3 Rank that translates into a short-term 'Hold'
MEREDITH CORP (MDP): Free Stock Analysis
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