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Presidential Election, Rio Olympics Expected To Give One-Two Punch To Tegna's Top and Bottom Line Growth

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Presidential Election, Rio Olympics Expected To Give One-Two Punch To Tegna's Top and Bottom Line Growth
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After a transitional 2015, Tegna Inc (NYSE: TGNA) could generate solid revenue and profit growth in 2016, Argus’s Joseph Bonner said in a report. He maintained a Buy rating on the company, with a price target of $33, saying that the shares seemed “attractively valued relative to peers.”

Tegna’s 2Q16 pro forma revenue came in at $812 million, representing 8.7 percent growth. GAAP revenue rose 7.3 percent, driven by higher retransmission consent revenue, strong political advertising, and digital growth, analyst Bonner mentioned.

Related Link: Are The Olympics Profitable?

Adjusted EBITDA was recorded at $288 million, up 13.7 percent, and adjusted EBITDA margin expanded 200bps to 35.5 percent. Non-GAAP EPS rose to $0.50 and GAAP EPS to $0.45, from $0.30 and $0.17, respectively, in 1Q15.

“CareerBuilder, a perennial laggard, posted improved results in 2Q16 as it continues to move through its business model transition,” Bonner wrote.

Strong Prospects

Expressing optimism regarding Tegna’s election-year prospects, the analyst noted that the company had television stations in several of the major election battleground states, like Ohio, Florida, Virginia, North Carolina and Colorado. Political advertising spending added $198 million to Tegna’s stations in the previous presidential election year.

Bonner further stated that the company was also poised to benefit from the Rio Summer Olympics telecast. He added that political advertising spending and the Rio Summer Olympics telecast would likely translate to strong revenue and profit growth this year, and estimated an average 20 percent EPS growth over the next couple of years.

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Latest Ratings for TGNA

DateFirmActionFromTo
Nov 2016JP MorganDowngradesOverweightNeutral
Nov 2016Stephens & Co.DowngradesOverweightEqual-Weight
Nov 2016FBR CapitalUpgradesMarket PerformOutperform

View More Analyst Ratings for TGNA
View the Latest Analyst Ratings

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