Shares in Yellow Media, publisher of the Yellow Pages print and online directories, tumbled more than 18% on the Toronto Stock Exchange on Monday amid reports of another analyst downgrade.
The Montreal-based company is transitioning to become a digital company, with more than 25% of its revenues coming from the online and mobile side of its business.
But reports of an accelerating decline in its print directory business and more gradual growth on the digital side was behind a negative report from Credit Suisse Canada analyst Colin Moore, The Globe and Mail reported.
The newspaper quoted Moore as downgrading the stock to “underperform” from “neutral” and slashing his price target to $2 from $5.
Shares in Yellow Media closed down 55 cents, or 18.4%, at $2.44 Monday on the Toronto Stock Exchange.
The company has said the $745-million sale of its Trader Corp. auto advertising unit is going ahead as planned to help reduce its red ink. It also announced the sale of Trader Corp. to a group of investors led by Apax Partners in late March.
At the end of May, Yellow Media was asked by the Investment Industry Regulatory Organization of Canada, on behalf of the Toronto Stock Exchange, to respond to market speculation about the company’s dividend policy and the state of the Apax deal.
The company said it would keep its current dividend payment at the annual equivalent of 65 cents a share.
Meanwhile the company has said growth should come from efforts of its sales team with a new multimedia offering called Yellow Pages 360 Solution, which offers tailored online, mobile, print and search engine solutions to small- and medium-sized businesses.
