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On Monday, Citi research analysts, led by Jason Bazinet, adjusted the price target for Lamar Advertising Company (NASDAQ:LAMR), a prominent outdoor advertising firm with a market capitalization of $12.7 billion, raising it to $128.00 from the previous $121.76. According to InvestingPro data, the company currently trades at a high earnings multiple of 24.75x and offers an attractive dividend yield of 5.09%. Despite the increase, Citi has chosen to maintain a Neutral rating on the company’s shares.
The revision of the price target follows the company’s disclosure of its fourth-quarter financial results for 2024. Lamar Advertising reported revenues of $2.21 billion with a 4.61% year-over-year growth and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $994 million that were slightly below market expectations. However, the company surpassed forecasts with its adjusted funds from operations (AFFO), a key metric in the real estate investment trust (REIT) industry. InvestingPro analysis reveals several more key insights about LAMR’s financial health and valuation metrics, available in the comprehensive Pro Research Report.
In light of the recent earnings report, Citi has made modest downward revisions to its revenue, adjusted EBITDA, and AFFO estimates for Lamar Advertising. The decision to increase the price target, according to Bazinet, is due to the extension of their valuation period to the year 2026. The new price target is approximately equivalent to 15 times the projected 2026 AFFO per share.
Bazinet’s statement provided further insight into the rationale behind the updated valuation: "We are updating our model to reflect 4Q24 results and our latest outlook. LAMR reported revenue and Adj. EBITDA just below the Street but beat on AFFO beat. Our revenue, Adj. EBITDA, and AFFO estimates move down modestly. However, our price target rises from ~$122 to $128 as we roll our valuation forward one year to 2026. Our target price is akin to 15x 2026 AFFO per share). We maintain our Neutral rating."
Lamar Advertising’s performance and the subsequent price target adjustment by Citi will continue to be monitored by investors as they assess the company’s position within the outdoor advertising market. With analyst price targets ranging from $121.76 to $150, and the next earnings report due on May 1, 2025, investors can access detailed financial analysis and real-time updates through InvestingPro’s comprehensive research tools and expert insights.
In other recent news, Lamar Advertising Company reported its fourth-quarter 2024 financial results, which showed a significant shortfall in both earnings per share (EPS) and revenue compared to analysts’ expectations. The company posted an EPS of -$0.01, well below the anticipated $1.43, and revenue came in at $579.6 million, missing the forecast of $583.19 million. Despite these challenges, Lamar noted a 4.2% increase in full-year acquisition-adjusted revenue, reaching $2.21 billion. The company also achieved a 4.5% rise in adjusted EBITDA, totaling $1.03 billion, with an improved EBITDA margin of 46.8%. Looking forward, Lamar plans to expand its digital advertising network significantly in 2025, with a target of deploying 350-375 new digital displays. The company also anticipates $150 million in mergers and acquisitions activity for the year. Analysts from Morgan Stanley (NYSE:MS) and JPMorgan have shown interest in Lamar’s plans, noting the company’s strategic focus on expanding its digital network and potential M&A opportunities.
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