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On Friday, Guggenheim analysts adjusted their financial outlook for Nexstar Broadcasting Group (NASDAQ:NXST), raising the price target to $220 from the previous $210 while reaffirming a Buy rating for the company’s shares. Currently trading at $162.58, Nexstar has shown strong momentum with an 8.71% gain over the past week. According to InvestingPro data, two analysts have recently revised their earnings expectations upward, supporting this positive outlook. This revision comes as a response to Nexstar’s fourth quarter earnings results and the management’s future financial projections.
Nexstar Broadcasting Group recently disclosed its fourth quarter revenue and adjusted EBITDA, which amounted to $1.488 billion and $628 million, respectively. These figures surpassed Guggenheim’s estimates, which had forecasted $1.479 billion in revenue and $586 million in adjusted EBITDA. The company’s strong performance is reflected in its "GREAT" Financial Health Score of 3.04 on InvestingPro, with particularly high marks in profitability metrics. The outperformance, particularly in EBITDA, was attributed to higher revenue and reduced losses at The CW network.
In addition to the fourth quarter results, Nexstar has provided guidance for its 2025 EBITDA, projecting a range between $1.500 billion and $1.595 billion. Guggenheim’s analysts have set their EBITDA expectation for 2025 at $1.542 billion, an increase from their earlier estimate of $1.458 billion. The revised forecast takes into account the diminished losses from The CW, benefits from restructuring efforts, and positive carryover from the fourth quarter.
The analysts anticipate that Nexstar’s distribution revenue in 2025 will remain relatively stable. This stability is expected to be supported by the renewal of 60% of the subscriber base towards the end of the year, which is likely to benefit the company’s 2026 financials. Additionally, core advertising revenue is projected to be flat or potentially increase, driven by The CW’s programming, digital expansion, and favorable comparisons in the second half of the year against a backdrop of easier crowd-out comps.
The raised price target of $220 reflects Guggenheim’s confidence in Nexstar’s strategic initiatives and the positive impact of recent performance trends on the company’s long-term financial outlook. The company has demonstrated strong shareholder commitment, maintaining dividend payments for 13 consecutive years with a current yield of 4.58%. For deeper insights into Nexstar’s valuation and growth potential, including 8 additional ProTips and comprehensive financial analysis, visit InvestingPro.
In other recent news, Nexstar Media Group Inc. reported its fourth-quarter 2024 earnings, revealing an earnings per share (EPS) of $7.56, which fell short of the forecasted $8.41. Despite the EPS miss, Nexstar achieved a record full-year revenue of $5.4 billion, marking the highest in the company’s 28-year history. The company’s strategic initiatives, including a significant reduction in CW network losses, have bolstered investor confidence, contributing to a positive market reaction. Nexstar has set a target for CW network profitability by 2026. Additionally, the company provided an adjusted EBITDA guidance range for 2025 between $1.5 billion and $1.595 billion. Nexstar also continues to explore mergers and acquisitions opportunities, optimistic about potential broadcast ownership deregulation. In analyst developments, Wells Fargo (NYSE:WFC) and Benchmark analysts expressed interest in Nexstar’s strategic initiatives and potential for growth through deregulation and spectrum monetization. These recent developments highlight Nexstar’s strategic focus on long-term growth and operational improvements.
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