June 28, 2011 / 3:09 PM / in 6 years

Yellow Media shares continue to slide as growth worries mount

June 28 (Reuters) - Yellow Media Inc's shares continued to slide for the second straight day on Tuesday, falling as much as 16 percent, on growing concerns over the Canadian telephone directory publisher's ability to switch from print to digital and its high debt burden.

The company has now lost nearly C$490 million of its market capitalization over the past two days.

Desjardins Capital Markets analyst Maher Yaghi on Tuesday cut his price target on Yellow Media stock to C$3.90 from C$5.30 and kept his "hold" rating, citing a lack of clarity in the company's growth strategy beyond the next year.

On Monday, two brokerages cut their price targets on Yellow Media shares, saying they expect falling earnings and tighter margins as businesses abandon print advertising.

"Online growth is serving only to partly mitigate the erosion of print advertising revenue, as we have yet to witness an increase in average revenue per advertiser," Yaghi said in a note to clients.

Shares of the Verdun, Quebec-based company slid 16 percent to C$2.04 in early trade on Tuesday. The stock was the most heavily traded on the exchange, with nearly six million shares changing hands by 1105 ET. (Reporting by Abhiram Nandakumar in Bangalore; Editing by Viraj Nair)

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