UPDATE: Citi Downgrades Lamar Advertising

In a report published Thursday, Citi analyst Jason Bazinet downgraded

to Neutral from Buy, raising its price target to $54.00 from $53.00. According to the report, in June 2013, LAMR issued a press release stating the IRS was forming a special working group to take a closer look at what constitutes ‘real property' for purposes of REIT conversion. “The Street interpreted this to mean two things: (1) At the very least, Lamar's PLR will be delayed significantly (causing the firm to miss its Jan 1, 2014 conversion date), (2) There's a chance Lamar will be denied its REIT conversion altogether,” the report noted. “We argued, however, the key drivers of Lamar's free cash flow – traditional and digital businesses – were highly likely to qualify. Furthermore, conversations with industry contacts led us to believe Lamar was very likely to achieve their Jan 1, 2014 target date (even with the IRS working group). With this in mind, we upgraded Lamar to Buy (from Neutral) as we believed REIT fears were overblown.” Some highlights from the report included: -Mr. Market Has Caught On -Remaining Catalysts Unlikely to Help Near Term -Increase Target Price, Downgrade to Neutral LAMR closed Wednesday at $50.33 with shares trading down at 1.59 percent.