OREANDA-NEWS. October 15, 2010. Target audience gross ratings points (GRPs, a measure of ad units) that are sold on CTC Media's flagship channel fell by 7% YoY in 3Q10, according to data from TNS and Aegis Media. GRPs sold on CTC's two smaller Russian channels showed mixed results, with Domashny increasing 16% and DTV declining 13%, reported the press-centre of OTKRITIE Financial Corporation.

View: The GRP decline on the CTC channel is largely a result of a drop in ratings. However, prices are up from 2009, so we do not expect YoY revenue to show a decline for 3Q10. Because the third quarter is seasonally weak for the TV ad market, CTC has been saving what it expects to be its strongest programming for Q4, when its performance will be far more crucial for annual revenues.

Valuation and Action: CTC trades at a 2011 EV/EBITDA of 12.1x. After rising almost 20% in the past month, CTC now trades close to our target price of USD 24.5/share.