On Wednesday, Rosenblatt Securities adjusted its price target for Nexstar Broadcasting Group (NASDAQ:NXST), bringing it down to $213 from the previous $216. Despite this change, the firm continues to recommend a Buy rating for the stock. The adjustment reflects an analysis of the company's business practices and market performance.
The firm's decision to maintain a Buy rating on Nexstar is based on several key factors. One of the primary reasons is the absence of family or dual share class control issues, which can often complicate corporate governance and affect shareholder value. Furthermore, Nexstar's history of effective capital allocation has been noted as a significant positive attribute.
Nexstar Broadcasting Group has demonstrated a consistent approach to share repurchases, having reduced its share count by 9% in 2023. This strategy is part of the company's broader capital management plan and is indicative of its commitment to returning value to shareholders.
The company's strategic acquisition moves have also been highlighted. Nexstar's successful completion of the Tribune deal, which was notably blocked for its competitor Sinclair Broadcast Group (NASDAQ:SBGI), has been described as "hugely accretive." This suggests that the acquisition has substantially increased Nexstar's earnings or net assets per share.
In comparison, Sinclair Broadcast Group has faced challenges, particularly with its investment in Diamond Sports RSN, which has since gone bankrupt. However, like Nexstar, Sinclair has also been actively repurchasing shares, reducing its share count by the same margin of 9% in 2023. This parallel in share repurchase strategies indicates a common industry approach to managing capital and enhancing shareholder value.
InvestingPro Insights
Nexstar Broadcasting Group (NASDAQ:NXST) continues to be an interesting prospect for investors, with InvestingPro data and tips providing further insights. The company's market capitalization stands at $5.53 billion, reflecting its substantial presence in the broadcasting industry. Moreover, Nexstar's commitment to shareholder returns is evident through its aggressive share buyback strategy and a high shareholder yield, as highlighted by InvestingPro Tips. This aligns with the Rosenblatt Securities' observations regarding Nexstar's effective capital allocation and share repurchase efforts.
An additional InvestingPro Tip points out that Nexstar has not only maintained but also raised its dividend for 11 consecutive years, showcasing a strong track record of rewarding its investors. This is further substantiated by a notable dividend yield of 4.09% as of the latest data, indicating a compelling income-generating opportunity for shareholders.
From a valuation perspective, Nexstar's adjusted P/E ratio for the last twelve months as of Q4 2023 is 14.19, which is lower than the unadjusted P/E ratio of 16.9. This suggests a potentially more attractive valuation when certain factors are considered. Furthermore, the company has maintained profitability over the last twelve months, which is a reassuring sign for investors focused on the company's financial health.
For those interested in exploring additional insights, there are more InvestingPro Tips available for Nexstar, which can be accessed through InvestingPro. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the full range of actionable data and analysis that InvestingPro has to offer.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.