The Financial Post reported that with the Yellow Pages Income Fund solid second quarter results, analyst Barbara Gray reaffirmed her “buy” rating and $15.50 price target. But Gray warned that her optimistic recommendation could be negatively affected as credit and private equity markets take a downward turn.

“Our $15.50 target includes a $2 leveraged buyout takeout premium, which may be at risk given recent weakness in credit and private equity markets,” Gray stated in a note to clients. “Without this premium, the upside is more limited.”

She also added that despite the current success of the Yellow Pages, it remains susceptible to the continuing shift away from print-based directory services to online services. Yellow Pages is currently in a sweet spot with near-monopoly status in the print market, she told clients, adding the company’s online business has so far been able to leverage its strong brand name, customer goodwill and existing infrastructure.

But with print usage expected to decline from 40% to 22% over the next 20 years, the article stated, the presence of online disrupters could eventually erode the advertiser and user base of the Yellow Pages.

Though I agree with Gray’s buy rating, I disagree with her forecast on the decline of print usage. Hard copy remains the most convenient medium to use, offering a unique opportunity for comparison shopping that the Internet simply does not provide.

Yellow Pages publishers are committed to ensuring the content is relevant, and that their hard copy products deliver the best value for advertisers. The Yellow Pages Group in Canada conducts close to 50 research projects a year with such well-known research firms as TNS Canadian Facts, Angus Reid Strategies, and Ad Hoc Research.

Despite a few negative forecasts reported in the media, I believe the hard copy editions of Yellow Pages will continue to deliver dreams at the speed of a touch. The key to continued usage will be rich, entertaining, and relevant content and the availability of the product in various formats.