1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
Nexstar recorded a strong fourth quarter as revenue and adjusted EBITDA came in above FactSet consensus. Core advertising was down 10% as COVID-19 continues to impact the ad market. However, management appears confident the local market will rebound in 2021. We are maintaining our no-moat rating and plan to raise our fair value estimate of $120 to account for stronger core ad revenue and distribution growth.
Nexstar is the largest television station owner/operator in the United States, with 197 stations in 115 markets. Of its 197 full-power stations, 158 are affiliated with the four national broadcasters: CBS (50), Fox (43), NBC (35), and ABC (30). The 2019 merger with Tribune made Nexstar the top broadcast affiliate for both Fox and CBS as well as the number-two partner for NBC and number three for ABC. The firm now has networks in 15 of the top 20 television markets and reaches 69 million television households. Nexstar also owns WGN, a nationwide pay-television network, and a 31% stake in Food Network and Cooking Channel.
