Nexstar Analyst Boosts Price Target By 36% As Tech, Politics Drive TV Stations

Rosenblatt analyst Barton Crockett upgraded Nexstar Media Group Inc NXST from Neutral to Buy and raised the price target from $181 to $246.
After reviewing his stance on TV stations, he sees a "surprising opportunity" in mix-driven ad resilience, hedges to cord-cutting, and new revenues from next-gen transmission tech capable of supporting growth for "sector leader" Nexstar, even in a recessionary environment.
Crockett retained Sinclair Broadcast Group, Inc's SBGI Neutral rating and $24 price target.
For both NXST and SBGI, the analyst updated estimates.
TV stations have secular growth in politics, which is guided up double digits for the year from the 4-year ago mid-term comp, and potentially could be even more robust and top the Presidential spending in 2020.
Emerging streaming replacements for pay TV hedge cord-cutting risks for TV stations.
It could be a ~7% lift, based on disclosures that Sinclair's RSNs are enduring ~9% pay TV sub declines, while Fox is pacing down over 5%. Nexstar, meanwhile, has seen its attrition stabilize thanks to CBS and NBC affiliates' inclusion on Paramount+ and Peacock.
Price Actions: NXST shares traded lower by 0.97% at $189.46 on the last check Tuesday. SBGI shares traded lower by 3.01% at $21.88.

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