On Tuesday, Outfront Media (NYSE: NYSE:OUT) received a price target increase from Citi to $21.00, up from the previous target of $19.00, while the firm maintained a Buy rating on the stock. The adjustment follows Outfront Media's third-quarter financial performance, where the company reported revenues that were slightly below expectations, adjusted operating income before depreciation and amortization (OIBDA) that met predictions, and adjusted funds from operations (AFFO) per share that surpassed consensus.
The company's latest financial results have prompted Citi to update its model, leading to the revised price target. Outfront Media's AFFO for the full year is now projected to be between $295 million and $300 million, which is approximately $5 million higher than the company's previous forecast. While Citi has slightly lowered its revenue projections for Outfront Media for the years 2025-2026, the firm anticipates a small increase in both adjusted OIBDA and AFFO estimates.
The new price target of $21 is based on an estimated 11 times the 2025 AFFO per share, as noted by the analyst at Citi. This valuation reflects the analyst's positive outlook on Outfront Media's financial prospects in the coming years.
The company's recent earnings report and the updated guidance have been key factors in Citi's decision to raise the price target. Outfront Media's ability to exceed consensus expectations with its AFFO per share indicates a robust financial position that supports the Buy rating and increased price target. The stock market will likely watch Outfront Media closely to see if the company continues to perform in line with the positive projections set forth by analysts.
In other recent news, OUTFRONT Media Inc. has reported a series of significant developments. The company has announced a special dividend for its shareholders, approved by the board of directors, amounting to $0.75 per share of its common stock. This dividend, scheduled for payment at the end of December, will consist of both cash and additional shares of common stock. Stockholders have the option to elect their preferred form of dividend payment, with the total cash distributed not exceeding the cash portion of the dividend.
In terms of financial performance, OUTFRONT Media has revealed an increase in U.S. media revenue by 5% and an 11% rise in adjusted OIBDA in the third quarter of 2024. The company's digital billboards have shown significant growth, with revenues increasing by 10% and now accounting for over 32% of total revenues. Despite facing challenges such as a non-material accounting error and recent storms, the company is projecting a 3% U.S. media revenue growth for the fourth quarter.
InvestingPro Insights
Outfront Media's recent performance and Citi's bullish outlook are further supported by real-time data from InvestingPro. The company's market capitalization stands at $3.1 billion, reflecting its significant presence in the outdoor advertising industry. Notably, Outfront Media boasts a strong dividend yield of 6.55%, which may be particularly attractive to income-focused investors in the current market environment.
InvestingPro Tips highlight that Outfront Media has demonstrated a "Strong return over the last three months" and is "Trading near 52-week high," aligning with Citi's positive stance and increased price target. These indicators suggest momentum in the stock's performance, which could be of interest to investors considering the analyst's upgraded outlook.
Additionally, the company's revenue for the last twelve months as of Q3 2024 was reported at $1.84 billion, with a gross profit margin of 47.58%. These figures provide context to Outfront Media's financial health and operational efficiency, which are crucial factors in assessing the company's ability to meet or exceed the new projections outlined by Citi.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Outfront Media, providing a deeper dive into the company's financial position and market performance.
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