Seven Undervalued, Citigroup Says

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By Robert Rudnicki

Extending what appears to be the key theme at most brokerages since the May correction kicked in, the analysts at Smith Barney Citigroup are taking a good look around at what stocks appear undervalued at current prices.

As far as the media sector is concerned, the broker says that even on its more cautious estimates, Seven is the "most undervalued of the domestic media stocks."

Although the analysts say forward visibility for the coming quarter is "limited" they have enough confidence to lift their TV EBIT estimates by 9% in FY06 and 4-5% in FY07-8 as they say the stock is continuing to perform well in what they see as a "sluggish revenue market."

With the stock currently trading at $8.49, it is no wonder Citigroup rates the stock Buy, Medium Risk when it has a target of $10.46.

Citigroup is far from alone in its view, with four other brokers rating the stock positively, three are neutral and one says Sell (Credit Suisse).

The average target on the stock is now $9.67.

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