Lamar Advertising Co (NASDAQ:LAMR) and its subsidiary, Lamar Media Corp., have entered into a significant agreement extending their accounts receivable securitization program. The amendment, announced today, pushes the maturity date to October 15, 2027, under certain conditions related to the company's liquidity and outstanding Term Loan B facility.
The Receivables Financing Agreement, originally dated December 18, 2018, involves Lamar Media, as the initial servicer, and special purpose entities (SPEs) as borrowers, with PNC Bank, National Association acting as the Administrative Agent and Lender.
The amendment introduces a 'springing maturity' clause that could potentially advance the maturity date if Lamar Media's $600 million Term Loan B facility and its liquidity status meet specific criteria 91 days prior to the facility's scheduled maturity date.
In other recent news, Lamar Advertising Co. has made significant strides in its financial operations. The company reported a 5.3% revenue increase in Q1 2024, marking the largest growth in 12 consecutive quarters. In a move towards financial flexibility, Lamar has extended the maturity date of their accounts receivable securitization program to October 15, 2027. This amendment is contingent upon the company's liquidity position related to its Term Loan B Facility.
Moreover, Lamar has extended its stock and debt repurchase programs, initially set to conclude in 2024, now extended to 2026. This extension allows for the buyback of up to $250 million of the company's Class A common stock and a similar amount for the debt repurchase program.
On the analyst front, TD Cowen maintained a Buy rating for Lamar and increased the stock's price target from $135.00 to $140.00, reflecting confidence in the company's performance. However, Citi downgraded Lamar Advertising stock from Buy to Neutral, indicating limited potential for near-term AFFO multiple expansion. Wells Fargo (NYSE:WFC) initiated coverage on Lamar with an Equal Weight rating and a price target of $132.
In addition to these financial developments, Lamar Advertising completed four acquisitions totaling $18 million in Q1, further solidifying its market position.
InvestingPro Insights
Lamar Advertising Co's recent extension of its accounts receivable securitization program aligns with its strong financial performance and market position. According to InvestingPro data, the company boasts a market capitalization of $13.92 billion and has demonstrated impressive revenue growth of 4.1% over the last twelve months as of Q2 2024. This growth, coupled with a robust gross profit margin of 66.94%, indicates Lamar's ability to effectively monetize its advertising assets.
InvestingPro Tips highlight that Lamar is trading near its 52-week high, with a substantial 76.49% price total return over the past year. This performance suggests investor confidence in the company's financial management and growth strategies, including the recently announced extension of its securitization program.
Moreover, Lamar's dividend yield of 4.11% may attract income-focused investors, although it's worth noting that dividend growth has been negative at -13.85% in the last twelve months. For investors seeking a deeper understanding of Lamar's financial health and prospects, InvestingPro offers 10 additional tips, providing a comprehensive analysis to inform investment decisions.
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