Newspaper publishers fall as UBS wary on sector

LONDON (Reuters) - Media stocks ended lower on Tuesday with newspaper publishers Trinity Mirror and Johnston Press knocked by negative broker comment.

UBS said in a note on newspaper publishers that it was keeping its "sell" ratings on both shares.

Although Trinity Mirror and Johnston Press trade at a discount to Daily Mail & General Trust (DMGT), UBS said it was concerned about structural risks facing the regional newspaper industry.

For Trinity Mirror, owner of the Daily and Sunday Mirror tabloids, it said the strength of competition at the tabloid end of the national newspaper market was a particular concern.

UBS began coverage on DMGT on Tuesday with a "neutral" rating and 750 pence price target, adding that it had an attractive portfolio of assets offering investors a relatively safer and more reliable way to play the advertising sector than peers such as Trinity Mirror and Johnston Press.

"However, the stock is not particularly compelling on valuation terms and we are concerned about certain aspects of their strategic focus," the broker said.

It added: "There are signs the Evening Standard circulation numbers are now stabilising and Eastern Europe offers a new route to growth. However, we have doubts over whether DMGT is choosing quantity over quality for its online sites and are structurally negative on the regional newspaper industry generally."

DMGT fell 3.3 percent to 651 pence.

Shares in Trinity Mirror ended 5.9 percent lower at 413-1/4 pence, setting a new 52-week low. Johnston Press fell 7 percent to 312p.