NXST – Market expectations are for compressing Uniform ROA, but management is confident about their local news segment, viewership, and News Nation Now

October 14, 2020

  • Nexstar Media Group, Inc. (NXST:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 12.8x Uniform P/E. At these levels, the market has somewhat bearish expectations for the firm, but management is confident about their local news segment, sustaining viewership levels, and News Nation Now
  • Specifically, management is confident in their ability to provide viewers and users continuous access to local news and other services such as health and economic challenges brought on by the pandemic. Furthermore, they are confident that changes in media consumption showcase the inherent strength of their leading local brands, and that local broadcast television evening news viewership remained high despite states and localities reopening. Management is also confident presidential campaigns’ fundraisings bode well for their upcoming political revenue trajectory, their decision to allocate approximately $594mn in cash from operations and investments toward debt reduction and opportunistic share repurchases, and that time-proven operating strategies will enable them to overcome near-term challenges. In addition, they are confident they will be able to rework the existing buys into the News Nation primetime offerings, and that their News Nation Now app will create monetization opportunities