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Nexstar Broadcasting (NXST) – “Local Content is King”

Nexstar Broadcasting Logo (NXST)

Nexstar Broadcasting (NXST)

Date:         December 2, 2016

Sector:       Consumer Discretionary – Broadcast Media

Price/Market Cap:  $59.2/$1.81B

Target/Implied Upside:  $115/ 94%


[note: This is a write-up and update of research completed earlier in the year]

Thesis

Nexstar Broadcasting Group (NXST), a television broadcasting and digital media company, is in the early innings of both a company and industry-wide transformation. The company generates healthy free cash flow and trades at an attractive standalone valuation while also benefitting from strong growth in retransmission fee revenue. NXST expects to close a merger with Media General (MEG) by the end of the year, which will be immediately accretive and make NXST the second largest local television broadcasting company in the United States.