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On Tuesday, TEGNA Inc. (NYSE:TGNA) saw its price target increased by Guggenheim from $20.00 to $22.00, with the firm reaffirming a Buy rating on the stock. The revision follows TEGNA’s recent first-quarter earnings report, which surpassed analyst expectations. TEGNA’s reported revenue reached $680 million, slightly above the $670 million anticipated, largely due to an increase in retransmission revenue. Additionally, the company’s adjusted EBITDA was $136 million, outperforming the predicted $126 million. Trading at $17.20, InvestingPro analysis suggests TEGNA is currently undervalued, with an attractive P/E ratio of 6.1x and a substantial free cash flow yield of 21%.
The analyst from Guggenheim highlighted TEGNA’s robust financial position, noting the company’s net leverage at 2.8 times at the end of the first quarter. With this strong balance sheet, TEGNA plans to continue its aggressive capital return strategy. Management has communicated a commitment to returning between 40% and 60% of its free cash flow (FCF) to shareholders over the next two years while maintaining approximately 3.0 times net leverage. InvestingPro data reveals the company’s impressive dividend track record, maintaining payments for 55 consecutive years, with a current yield of 2.91%. TEGNA’s overall Financial Health Score is rated as GREAT, supported by strong profitability metrics.
Looking ahead, Guggenheim has adjusted its full-year 2025 EBITDA forecast for TEGNA from $545 million to $591 million, mainly due to anticipated higher revenue. This adjustment reflects the firm’s confidence in TEGNA’s growth trajectory and its ability to leverage its financial strength.
TEGNA’s management team has also expressed a continued interest in exploring merger and acquisition opportunities, especially in light of potential deregulation in the current year. The company’s proactive stance on capital returns and strategic growth initiatives has been well-received by analysts, as reflected in the upgraded price target.
In other recent news, Tegna Inc . reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $0.37, compared to the forecasted $0.32. The company also exceeded revenue projections, reporting $680 million against a forecast of $677.48 million. Despite a 5% year-over-year decline in total revenue, Tegna’s results indicate a strong financial performance amidst macroeconomic challenges. The company is focusing on cost-cutting and digital innovation, which includes testing new AI systems and developing digital apps. Tegna’s management expressed interest in exploring strategic opportunities for mergers and acquisitions, particularly with the anticipated deregulation in the broadcasting sector. The company has also lowered its effective tax rate guidance for 2025 to 22-23%, which could positively impact net earnings. Analyst firms have not provided any recent upgrades or downgrades for Tegna. These developments reflect Tegna’s strategic initiatives and adaptability in a competitive media landscape.
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