Benchmark raises Nexstar stock target to $225, maintains Buy rating

On Friday, Benchmark analyst Daniel Kurnos increased the price target for Nexstar Broadcasting Group (NASDAQ: NXST) to $225 from the previous $200 while maintaining a Buy rating on the company’s shares. The new target aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $172 to $220, with the stock currently trading at a modest P/E ratio of 9.7x.

Kurnos highlighted Nexstar’s unique position within its peer group, noting that the company’s performance defied expectations for a "relatively benign end to the year." The analyst’s optimism appears justified, as the stock has delivered an impressive 8.7% return over the past week. The analyst was taken aback by Nexstar’s ability to guide distribution growth as flattish for the year, considering both gross and net figures, a scenario that seemed more optimistic than could have been predicted a week prior. The company’s strong financial health is reflected in its 21% free cash flow yield and consistent dividend growth, having raised payouts for 12 consecutive years.

The new guidance provided by Nexstar suggests a broader range of potential outcomes, with slight variations in growth or decline for both core and distribution revenue. This outlook also aligns with the new EBITDA range, which conveniently brackets the consensus. With an EBITDA of $2.1 billion in the last twelve months and management actively buying back shares, InvestingPro analysis reveals 8 additional key insights about Nexstar’s financial outlook.

Kurnos acknowledged the unpredictability in forecasting for Nexstar, given the changes in guidance and potential regulatory tailwinds. He suggested that even without significant changes on the regulatory front, Nexstar’s stock is poised to continue its upward trajectory, supported by its robust gross profit margin of 59% and strong overall financial health score.

In other recent news, Nexstar Broadcasting Group reported its fourth-quarter 2024 earnings, revealing a record full-year revenue of $5.4 billion. However, the company missed the forecasted earnings per share (EPS) of $8.41, reporting an EPS of $7.56. Despite this, Nexstar’s stock saw a significant rise, attributed to strategic initiatives and operational improvements. Guggenheim analysts responded to the earnings results by raising their price target for Nexstar to $220, maintaining a Buy rating. The analysts noted that Nexstar’s revenue and adjusted EBITDA exceeded their estimates, with revenue reaching $1.488 billion and adjusted EBITDA at $628 million. Additionally, Nexstar has provided guidance for its 2025 EBITDA, projecting a range between $1.500 billion and $1.595 billion. The company anticipates a stable distribution revenue in 2025, supported by the renewal of 60% of the subscriber base. Nexstar’s efforts to reduce losses at The CW network and plans for its profitability by 2026 have also been highlighted as key strategic moves.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.