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On Tuesday, Benchmark analyst Daniel Kurnos adjusted the price target for Nexstar Broadcasting Group (NASDAQ: NXST) shares, reducing it to $215 from the previous $225. Despite the lowered price target, the firm continues to recommend a Buy rating for the stock. According to InvestingPro analysis, the stock appears undervalued at its current price of $154.17, trading at an attractive P/E ratio of 7.1x.
Kurnos highlighted Nexstar’s position in the broadcasting industry, noting its significant national market exposure, robust balance sheet, and ownership of a retrans and reverse generating network. The analyst pointed out that Nexstar’s ability to negotiate retransmission rates and its influence in Washington are key advantages for the company. InvestingPro data reveals the company’s strong financial health, with a "GREAT" overall score and an impressive 4.79% dividend yield, having raised dividends for 12 consecutive years.
Nexstar’s stock performance has been stable year-over-year, placing it in the middle of its peer group. Kurnos mentioned that while highly leveraged companies have generally performed better, Nexstar’s shares have seen a rebound since trading under $150. The analyst expressed confidence in the stock, suggesting that the potential rewards outweigh the risks, with substantial downside protection in case regulatory changes do not occur.
The forecast and price target adjustments take into account some timing factors, such as a shift in profitability from the first quarter to the fourth quarter. Nevertheless, Kurnos believes that Nexstar’s fundamental thesis and cash flow story remain intact, even before considering additional opportunities that may arise. Supporting this view, InvestingPro data shows management has been actively buying back shares, and the company maintains a strong free cash flow yield. For deeper insights into Nexstar’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Nexstar Media Group (NASDAQ:NXST), Inc. announced a quarterly cash dividend of $1.86 per share, payable on June 2, 2025, to shareholders on record as of May 19, 2025. This move underscores Nexstar’s commitment to providing shareholder value and confidence in its financial stability. Meanwhile, Grizzly Research disclosed a short position on Nexstar, expressing concerns about the company’s digital strategy and declining engagement with its digital assets. The report highlighted issues such as underinvestment in technology and a lack of strategic direction in digitalization efforts.
Nexstar also shared that Dennis FitzSimons, a long-serving director, will not seek re-election and will step down from the board following the upcoming annual stockholders’ meeting. This announcement was part of a standard SEC filing. Additionally, Apollo Global Management (NYSE:APO) is exploring the sale of Cox Media Group, with Nexstar mentioned as a potential buyer, though no comments have been made by the company regarding this matter.
Citi analysts have maintained a Neutral rating on Nexstar shares with a price target of $186, following the company’s fourth-quarter 2024 performance that exceeded Wall Street expectations. Nexstar reported revenue and adjusted EBITDA figures that surpassed forecasts, and it reduced operating losses at The CW network by $126 million over the year. Despite these achievements, Citi’s stance remains unchanged, reflecting a view that the stock is fairly valued at its current price target.
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