Clear Channel Clearing Debt

Despite a 31% rise in the stock up to today, outdoor advertising mavens Clear Channel Outdoor (CCO), may see a more attractive valuation in coming weeks as it extricates itself from an onerous arrangement with its parent, privately held Clear Channel Communications. That’s the assertion this morning in a note to clients from Caris & Co. analyst David Miller, who raised his target price on the stock to $10 from $9. CCO stock trades at $8.59, up 7 cents, or .8%.

CCO owes Clear Channel Media $2.5 billion in inter-company loans, notes Miller, and he thinks CCO is getting ready to roll over some of its bonds to repay that loan, which would save the parent from bankruptcy and which would mean the transfer of $490 million in cash to CCO, which would boost the latter’s Ebitda. Miller says Clear Channel’s mall advertising business is improving, as well. Miller thinks CCO stock is also trading at an unreasonable 20% discount to competitor Lamar Advertising (LAMR).