Sinclair Earnings: Litigation Overshadows Decent Quarter; Political Ads Will Boost 2024

Sinclair ended 2023 on a sour note. While results met the low end of our expectations and key metrics trended up in the quarter, the litigation settlement with Diamond Sports Group resulted in negative EBITDA and net income. The settlement shouldn’t affect future operating results, but we also don’t think the positive underlying trends will continue. Nonetheless, Sinclair should greatly benefit from record political spending in 2024. We are lowering our fair value estimate to $12 from $13 for no-moat Sinclair to reflect slightly slower growth expectations.