Pivotal Research: For Nielsen Holdings, The Reality Is Better Than The Perception

Nielsen Holdings PLC NLSN stock is being unfairly punished by investors despite fundamentals that remained largely unchanged over the past year, according to Pivotal Research Group. 

The Analyst

Analyst Brian Wieser upgraded shares of Nielsen from Hold to Buy and maintained a $35 price target. 

The Thesis

The perception of Nielsen's challenges appear "much worse" than the company's fundamental reality, Wieser said in a Monday note. Some of the concern is due to advertisers reducing their reliance on age- and gender-based metrics, 

"We think this is not likely to occur broadly anytime soon," the analyst said. 

Networks that want to sell to advertisers will continue to need Nielsen data, he said. 

"If anything, there is potential for upside from the use of additional Nielsen services (such as NBI or NCS) in establishing complementary targets." 

Despite the threat of cord-cutting and cord-shaving, Nielsen is gaining new customers by way of upstart SVOD services and vMVPDs, Wieser said. The growth of digital media, which pays based on campaigns, is a positive for the company, he said. 

Further measurement of non-traditional ad-supported TV services and the resumption of growth in Nielsen's buy businesses could serve as catalysts, Wieser said. 

Investor sentiment on Nielsen will rebound, the analyst said. 

The Price Target

Nielsen shares have lost about 16 percent year-to-date.

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