SBGI - Embedded Expectations Analysis - 2019 11 01
Sinclair Broadcast Group, Inc. (SBGI:USA) is currently trading well below recent averages relative to UAFRS-based (Uniform) Earnings, with a 6.0x Uniform P/E. At these levels, the market has bearish expectations for the firm, and while management appears concerned about their cash balance, net leverage ratio, and revenue growth, the firm's strong execution and position in its space suggest longer-term upside remains warranted.Specifically, management may be about their net cash tax expenses and about the sustainability of current cash levels. Furthermore, they may lack confidence in their ability to lower their net leverage ratio and sustain revenue growth in their digital segment. Finally, they may be concerned about further revenue erosion in their media segment.
That said, even with near-term headwinds suggested by management's pessimism, long-term outperformance remains warranted at current valuations.
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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