Clear Channel Outdoor Holdings (NYSE:CCO) shares jumped more than 13% Wednesday after Wells Fargo upgraded the stock to Overweight from Equal Weight, raising the stock's price target to $2.75 from $1.50 per share.
Analysts said the firm sees inflecting growth and a clearer path towards streamlining into America and airports for the company.
"We think CCO America is at a positive inflection point as key markets like LA and SF recover," the analysts wrote. "Overall ad spend should accel in '24 and OOH could emerge as a long-term share gainer (esp. given TV's declines). Digital strength is typically a leading indicator, and CCO has seen accelerating programmatic trends."
The analysts also noted that CCO is streamlining its portfolio, explaining that it has divested Europe-South, while they think it is close on Europe-North. It is also said to be reviewing options for LatAm.
"We think investors are less concerned with the valuation of Europe-North (within reason), as the SOTP shows consolidated upside on America via re-rating closer to peer multiples post-sale," said the analysts. The America business is very sound in terms of organic growth, market position, and margin expansion."