Morningstar Increases 'Uncertainty Rating' On E.W. Scripps Stock Value

Fitz: In a note to investors, Chicago-based investment research firm Morningstar increased its "uncertainty rating" on its estimated fair value of E.W. Scripps Co. (NYSE: SSP) shares. The downgrading, to high from medium, is a measure of less confidence in Morningstar's assigned value of $8 share, which was set soon after E.W. Scripps spun off its more profitable lifestyle cable and  digital assets into a separate publicly traded company called Scripps Networks Interactive.

SSP closed Wednesday at a new all-time low of $5.68, down 41 cents, or 6.73%, from the opening.   

Morningstar also reaffirmed the declaration it made after last summer's spin-off that   SSP no longer has any "economic moat," or ability to fend off competitors for an extended period.

Morningstar's reasoning for both actions could apply to nearly any company heavily invested in newspapers: "We've increased our uncertainty rating for E.W. Scripps SSP to high from medium as we think this newspaper publisher will continue to face severe head winds given the current economic conditions in the United States. The company faces structural challenges as the newspaper publisher in a declining industry in addition to the advertising weakness that plague all media companies."