SBGI - Embedded Expectations Analysis - 2019 03 26
Sinclair Broadcast Group, Inc. (SBGI:USA) is currently trading well below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 9.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management has concerns about their political ad revenue and distribution fee growth, drone journalism, and digital technology launches.Specifically, management may lack confidence in their ability to sustain political ad revenue and distribution fee growth, and may be concerned about their free cash flow guidance and credit portfolio. In addition, they may be exaggerating the cost efficiency of their TIP system, revenue bumps from presidential election cycles, and the effectiveness of their drone journalism. Also, they may be concerned about station renewal discussions, cash flow requirements for joint ventures, and their ability to launch digital products. Finally, they may be exaggerating the value proposition of their unique content as well as opportunities in the RSN space, and may be downplaying concerns about MVPD sub declines.
Sinclair Broadcast Group is a television broadcasting company with using the company's spectrum to bring together content providers, advertisers, and consumers on various platforms. The content, distributed through the company's broadcast platform, consists of programming provided by third-party networks and syndicators, local news, the company's own networks, and other original programming produced by the company The company also distributes its original programming, and owned and operated network, on other third-party platforms. The company operates technical services companies focused on supply and maintenance of broadcast transmission systems as well as research and development for the development of broadcast technology.
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