UPDATE: Deutsche Bank Downgrades CTC Media to Hold, Lowers PT

In a report published Wednesday, Deutsche Bank downgraded its rating on CTC Media

from Buy to Hold, and slightly lowered its price target from $9.50 to $9.30. Deutsche Bank noted, “The near-term outlook for the advertising market in Russia has stabilized, although uncertainty over the global economy remains. Longer term, as we expect Russian household consumption growth to stay in double digits, we forecast a three-year CAGR in advertising of 12% and 10% in TV. In 2012F, we estimate CTC Media's revenue to grow by 9% in Rubles, slightly ahead of the expected sector growth due to strong ratings from smaller channels. We expect 2013F revenue growth to be c.10% in Rubles. We expect the company's EBITDA margin to decline to 29% in 2012F, slightly below management guidance of "about 30%", due to rising content costs, and we expect margin to decline in the medium term, hitting the bottom in 2015-17F (as we conservatively expect transmission costs to increase sharply due to a roll-out of multiplex). Given insufficient return, we rate the stock Hold.” CTC Media closed on Tuesday at $9.25.