Benchmark Company Reiterates Buy Rating, $16 PT on Sinclair Broadcast Group
In a report published Friday, Benchmark Company reiterated its Buy rating and $16.00 price target on Sinclair Broadcast Group (NASDAQ: SBGI).
Benchmark Company noted, “Following a better than expected 3Q12 driven by strong core advertising, led by auto, up 12% y/y, direct response and telecommunications (which had been soft earlier), $28 million in political advertising vs. $2.4 million a year earlier and higher retransmission revenues, Sinclair management projected higher than expected 4Q12 net broadcast revenues, up 48-49% y/y to $268-$270 million vs. our previous estimate of $258 million, including $59.8 million from the acquisition of the Four Points, Freedom TV stations and Bay TV (WTTA), as well as $54-$56 million in political advertising. On a same station basis, excluding the acquisitions, net broadcast revenues are expected to be up 20-22% y/y and flat excluding political, reflecting the crowding out effect due to greater than expected political advertising. Including Barter and other revenue, total 4Q12 revenues are expected to be $306 million, up 44%, with EPS reaching $0.56 vs. $0.32 a year earlier, below our previous $0.62 estimate, reflecting higher interest expense and a higher tax rate. EBITDA ought to reach $133 million, up 66% vs. $80 million last year.”
Sinclair Broadcast Group closed on Thursday at $11.09.
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