Nexstar Reports In-Line Q3 Results; Political Ad Revenue Hitting Record Levels

Nexstar posted an in-line third quarter with revenue and adjusted EBITDA that met FactSet consensus projections. As expected, political ad revenue skyrocketed to $240 million from $26 million a year ago. Management announced that 2022 political ad revenue hit $500 million as of Nov. 8, a record for a midterm election year and well ahead of the pro forma $383 million generated in 2018. Due to continued growth in political ad spending and increased politicization across the U.S., we now expect Nexstar to set political ad revenue records in 2024 and 2026. As a result, we are raising our fair value estimate to $205 from $195.