Nexstar Posts Strong Q2 Results; Political Ad Revenue Projected to Hit Record Midterm Levels

Nexstar reported another strong quarter as second-quarter revenue met and adjusted EBITDA beat FactSet consensus projections. Political ad revenue jumped in the quarter to $87 million up from $9 million. Given the growth at Nexstar and Sinclair along with several competitive races and high fundraising levels, we expect record political spending for a midterm election year. Distribution revenue improved 5% as the firm benefited from higher renewals in 2021. We are raising our fair value estimate to $195 from $175 to account for higher political ad and distribution revenue growth along with some slight margin improvement.