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Investing.com - TD Cowen has reiterated its Buy rating and $145.00 price target on Lamar Advertising (NASDAQ:LAMR) following the company’s acquisition of Verde Outdoor. The target represents an 18% upside from the current price of $122.96, with InvestingPro data showing the stock has delivered a solid 8.1% return over the past year.
The cashless transaction adds more than 1,500 billboards to Lamar’s portfolio, including 80 digital faces, according to TD Cowen analyst Lance Vitanza.
The deal structure provides sellers with long-term upside potential, which TD Cowen believes was likely a key factor in Ernest Garcia’s decision to sell Verde Outdoor to Lamar.
TD Cowen noted that the transaction reinforces its thesis that fiscal year 2025 will be a "breakout year" for billboard acquisitions in the outdoor advertising sector.
With no cash or debt used in the Verde acquisition, Lamar maintains financial capacity for additional merger and acquisition activity in the second half of the year, according to the research firm.
In other recent news, Lamar Advertising Company reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $1.35, compared to the forecasted $1.31. However, the company’s revenue of $505.43 million fell short of the anticipated $509.2 million. In addition to its earnings report, Lamar announced the acquisition of Verde Outdoor, marking the first UPREIT transaction in the billboard industry, which added over 1,500 billboard faces to its portfolio. The company also declared a quarterly cash dividend of $1.55 per share and expanded its stock buyback program by $150 million, bringing the total available for repurchases to $250 million.
Citi analysts recently upgraded Lamar’s stock rating from Neutral to Buy, raising the price target to $19.00 from $17.00, reflecting a more optimistic outlook on the advertising sector. Lamar’s digital billboard revenue grew by 4%, now comprising 30% of total billboard revenue, while programmatic revenue increased by nearly 30%. The company completed 10 M&A deals worth $22 million, underscoring its strategic focus on expansion. Despite a slight dip in adjusted EBITDA, Lamar maintained its full-year AFFO guidance and anticipates organic revenue growth of around 3% for the year.
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