GTN - Embedded Expectations Analysis - 2021 04 29
Gray Television, Inc. (GTN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 14.8x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about their capital allocation strategy, their leadership position in local markets, and the Quincy Media acquisitionSpecifically, management may lack confidence in their ability to maintain their leading local market positioning, find accretive acquisitions in smaller markets, and negotiate better contracts with operators. Furthermore, they may be exaggerating the quality of their assets, as well as the benefits of acquiring Quincy Media. Moreover, management may have concerns about the progress of their TV station divestitures, the pace of the recovery of auto advertising demand, and Quincy Media's ability to generate free cash flow. Additionally, they may lack confidence in their ability to both issue dividends and invest in growth, sustain advertisement revenues following the election campaign season, and capitalize on the growing advertising budgets of gambling companies
Gray Television is a holding company. Through its subsidiaries, the company is a television broadcast company that owns television stations and digital assets. The company broadcasts separate program streams, including affiliates of the ABC Network (ABC), the NBC Network, the CBS Network (CBS) and the FOX Network (FOX). In addition to affiliations with ABC, CBS and FOX, the company's secondary channels are affiliated with numerous networks and program services including, among others, the CW Network or the CW Plus Network, MY Network, the MeTV Network, This TV Network, Antenna TV, Telemundo, Cozi, Heroes and Icons and MOVIES! Network. The company also broadcasts local news/weather channels in some markets.
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