Citigroup Reiterates Neutral, Ups PT to $26 on Lamar Advertising

Citigroup maintains its Neutral rating on Lamar Advertising (NASDAQ: LAMR) and raises its price target from $20 to $26 as the company delivers better-than-expected top line results and looks to improve cash flows by reducing leverage. Citi notes, “Better top-line improvement offset by more significant increases in opex and rising capex are apt to translate into about $200 to 225 million of FCF over the next few years. …With stable FCF and rising EBITDA, we do expect Lamar's leverage to fall below 4.0x by 2013. As such, we have incorporated $400 million in share repurchases into our model in 2013 and 2014. This should allow Lamar to grow FCF per share from $2.40 in 2012 to $2.54 in 2013.”LAMR closed at $23.27 per share on Wednesday.