UPDATE: Bank of America Upgrades CTC Media to Buy

Bank of America upgraded CTC Media

from Neutral to Buy, but lowered its price objective from $12 to $11 a share. Bank of America noted, "CTC Media shares have underperformed the RTS index by 20% and European media index by 25% since May 2012. Although we are still cutting our numbers on FX and lower audience share, we think potential consensus downgrades are already priced in. We argue that the share price already reflects weak 2Q and upcoming weak 3Q numbers and that audience share improvements in the autumn season could attract investor attention back to the story. The stock looks cheap on 9x 2013E PE and 4.9x EV/EBITDA – at a c 20% discount to West European broadcasters despite its healthier growth outlook. We lower our 12-month PO from US$12.5 to US$11 and see 30% return potential for the stock." CTC Media closed at $8.52 a share on Tuesday.