Lamar Advertising Set To Reload On M&A Later This Year

Lamar Advertising Company LAMR seems finally poised to re-engage in M&A activity by the end of the year. Thus, Look Capital Markets analyst David Miller, who had believed this activity would occur in 2016 and still sees it happening in the future, has continued his Buy rating and set an $87 price target.

Potential M&A Targets

According to Miller, the following companies are potential M&A targets for Lamar:

• Adams Outdoor (Charlotte, NC)
• Steen Outdoor (Miami)
• Regency Outdoor (Los Angeles)
• Reagan Outdoor (Salt Lake City)
• Griffin Outdoor (Pensacola)
• Greensigns Outdoor (Chicago)
• Gordon Outdoor (Lawrence, Kansas)
• Gilbreath Outdoor (Friendswood, TX)

3 Key Takeaways

1. According to Miller, this speculation started when a variety of small and private operators emerged as potential “tuck-in deals which LAMR could easily consummate.” Miller still believes the “the Outdoor business is ripe for consolidation.”

2. While it is not known whether Lamar Advertising is targeting any companies, Miller said companies that can be purchased in the $25 million–$45 million are perfect targets. “We believe LAMR is gearing up to announce in the next two to three-quarters, deals likely using all cash, and we continue to feel the need to call this out so as to be ahead of the curve,” said Miller.
3. Miller thinks the stock has been unnecessarily penalized since its first-quarter earnings report, in what was a relatively “clean” release.

Throughout The Street

According to Nasdaq.com, the consensus recommendation on Lamar Advertising is at Buy, with a consensus price target at $68.5.

Lamar Advertising was trading relatively flat in Thursday’s trading session. To keep up to date on possible M&A rumors check out the Benzinga Pro News Wire.

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