Nexstar Posts Better Than Expected End to 2021; Auto Ads Expected to Return in Second Half of 2022

Nexstar reported a better than expected fourth quarter as revenue met and adjusted EBITDA beat FactSet consensus projections. Core advertising was up 4% year over year in the fourth quarter, as ad spending continues to recover despite automotive remaining weak. Distribution revenue improved by 17% as the firm benefited from higher rate increases from renewals in 2020. Management expects that renewals in 2021 and 2022 will lead to mid- to high-single-digit growth in 2022 with higher growth in 2023. We are maintaining our no-moat rating and $165 fair value estimate.