UPDATE: Citigroup Upgrades McClatchy to Buy on Circulation Growth Opportunities

Citigroup raises its rating on The McClatchy Company MNI from Neutral to Buy (High Risk) and established a $3.50 price target. Citigroup commented, "We upgrade MNI to Buy with a $3.50 price target on potential circ revenue catalysts and recent underperformance. … Sentiment on GCI has benefited from guidance for 25% '13 circ revenue growth. While MNI did discuss circ strategy on the 2Q call, they've been less aggressive is discussing these opportunities. Looking out to '13, we see potential upside to estimates from both print and digital. … Based on our analysis, MNI generates only $0.34 in circ rev/paper. We believe this could be $0.50, which could generate $80mil of revenue, or 30% upside to our '13 circ rev estimate." McClatchy closed at $2.47 on Monday.