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UPDATE 1-RESEARCH ALERT-JP Morgan downgrades Lamar Advertising

Wed Mar 19, 2008 7:14am EDT

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March 19 (Reuters) - J.P. Morgan Securities downgraded Lamar Advertising Co (LAMR.O) to "underweight" from "neutral," saying the company's cyclical outdoor advertising business would be hurt by soft macro-conditions.

The brokerage said the softness was driven by local advertising weakness, with non-renewals in the real estate segment contributing to lower occupancy and a tough credit environment impacting the local customer's ability to access capital for advertising spending.

The outdoor advertising firm's static bulletin business, which accounts for 60 percent of its revenue, will experience declines in 2008 that could lead to further downward estimate revisions by Wall Street analysts, the brokerage said.

For 2008, the brokerage cut its revenue growth view to 2 percent from 2.8 percent. It now expects earnings before interest, taxes, depreciation and amortization (EBITDA) to fall 1.4 percent, versus its previous view of flat EBITDA growth.

Shares of Lamar closed at $34.80 Tuesday on Nasdaq. (Reporting by Tenzin Pema in Bangalore; Editing by Amitha Rajan)

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