Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
Investing.com - Benchmark has raised its price target on Gray Television (NYSE:GTN) to $9.00 from $7.00 while maintaining a Buy rating. The stock, currently trading at $4.83, appears undervalued according to InvestingPro’s Fair Value model, while showing strong momentum with a 36.44% gain year-to-date.
The price target increase follows Gray Television’s recent refinancing process that has "completely revitalized" the company’s balance sheet and capital table, according to Benchmark. While the company still carries leverage, it is now "substantially more manageable and at good terms considering the market." The company maintains a "GOOD" Financial Health Score according to InvestingPro, which offers comprehensive analysis of over 1,400 stocks through its Pro Research Reports.
Benchmark noted that Gray Television’s third-quarter 2025 retransmission guidance initially appeared concerning, showing a $25 million quarter-over-quarter decline. This drop was attributed to the shift of WANF in Atlanta from a "big 4" network to an independent station.
Despite this change, Benchmark believes the CBS affiliation renewal will offset the impact, potentially resulting in "a nice net positive for retrans margins in 2026."
The research firm also highlighted Gray Television’s recent acquisitions, stating the company acquired "a minimum of $80 million in EBITDA across 4 separate transactions totaling $253 million," which Benchmark describes as "both massively accretive and deleveraging at the same time."
In other recent news, Gray Television reported its second-quarter 2025 earnings, which revealed a notable miss on earnings per share (EPS) expectations. The company posted an EPS of -$0.71, which was significantly below the anticipated -$0.37. On the revenue front, Gray Television managed to slightly surpass forecasts, reporting $772 million against the expected $766.31 million. Despite this revenue beat, the market’s reaction was negative due to the earnings miss. In related developments, Wells Fargo (NYSE:WFC) adjusted its price target for Gray Television, raising it to $5.00 from $4.50. The bank maintained an Equal Weight rating, citing benefits from mergers and acquisitions as a reason for the increased target. Wells Fargo highlighted deleveraging and free cash flow accretion from these activities as key factors. The firm’s valuation model now includes a target multiple of 7.4x. These updates reflect recent developments concerning Gray Television.
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