September 29, 2017

CCO – Market expectations are for record-high Uniform ROA, but management’s concerns about operating income and their digital displays imply this may be unwarranted


  • Clear Channel Outdoor Holdings, Inc. (CCO:USA) currently trades near historical lows relative to UAFRS-based (Uniform) Assets with a 1.4x Uniform P/B. However, even at these levels, the market has fairly bullish expectations, which, given management’s concerns about operating income and their digital displays, may be unwarranted
  • Specifically, management appears concerned about the sustainability of growth in new digital displays, and the value of their digital billboard investments. They also appear concerned about the sustainability of operating income growth. Should the firm fail to drive Uniform ROA to record-highs, as management sentiment suggests, equity downside would be warranted

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