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Sinclair Inc Ordinary Shares - Class A SBGI

Morningstar Rating
$14.59 −0.19 (1.29%)
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Company Report

Sinclair: Diamond Sports Settlement Hits Our Fair Value Estimate

Sinclair announced the resolution of claims by Diamond Sports Group against Sinclair as a part of DSG’s bankruptcy and reorganization. In July 2023, DSG filed suit against Sinclair seeking $1.5 billion for alleged misappropriation of funds from Diamond prior to its bankruptcy filing. Sinclair has now agreed to pay DSG $495 million in cash, which will result in an estimated post-tax net cost to Sinclair of $250 million-$325 million. We previously believed DSG would provide no value for Sinclair, but we also didn’t expect Sinclair would be forced into this large a settlement. We are reducing our fair value estimate to $13 from $15.

Price vs Fair Value

SBGI is trading at a 12% premium.
Price
$14.59
Fair Value
$78.00
Uncertainty
Very High
1-Star Price
$75.35
5-Star Price
$4.30
Economic Moat
Bkck
Capital Allocation
Cgskmpv

Bulls Say, Bears Say

Bulls

Sinclair can drive local ad revenue growth via its duopoly markets.

Bears

Declining local news consumption hurts growth in local advertising, still a significant source of revenue for Sinclair.

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News

Trading Information

Previous Close Price
$14.78
Day Range
$13.8314.74
52-Week Range
$9.3921.17
Bid/Ask
$14.59 / $14.59
Market Cap
$926.68 Mil
Volume/Avg
472,908 / 465,530

Key Statistics

Price/Earnings (Normalized)
10.92
Price/Sales
0.31
Dividend Yield (Trailing)
6.85%
Dividend Yield (Forward)
6.85%
Total Yield
24.01%

Company Profile

Sinclair Broadcast Group is the second-largest television station operator in the U.S., with 185 stations in 86 markets. Of the firm's roughly 600 channels, 150 are affiliated with the four national broadcasters—Fox, ABC, CBS, and NBC—with over 80 other channels on networks aligned with The CW (Nexstar) and MyNetworkTV (Fox). The firm also owns the Tennis Channel and four multicast networks. Via the 2019 purchase of the Fox regional sports networks from Disney, Sinclair is now the largest owner of Diamond Sports, which operates regional sports networks. Diamond Sports sought bankruptcy protection in early 2023.
Sector
Communication Services
Industry
Entertainment
Stock Style Box
Small Value
Total Number of Employees
7,900

Competitors

Valuation

Metric
SBGI
CHTR
CMCSA
Price/Earnings (Normalized)
10.928.8510.58
Price/Book Value
1.503.762.02
Price/Sales
0.310.801.43
Price/Cash Flow
1.972.936.34
Price/Earnings
SBGI
CHTR
CMCSA

Financial Strength

Metric
SBGI
CHTR
CMCSA
Quick Ratio
2.000.280.50
Current Ratio
2.330.310.60
Interest Coverage
1.152.326.01
Quick Ratio
SBGI
CHTR
CMCSA

Profitability

Metric
SBGI
CHTR
CMCSA
Return on Assets (Normalized)
3.05%3.92%6.32%
Return on Equity (Normalized)
26.50%55.87%19.98%
Return on Invested Capital (Normalized)
8.37%8.68%10.60%
Return on Assets
SBGI
CHTR
CMCSA
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