On Thursday, Guggenheim maintained a positive stance on TENGA, Inc. (NYSE: TGNA), increasing the stock's price target to $22 from $19 while keeping a Buy rating. The adjustment follows TENGA's release of third-quarter earnings, which surpassed expectations with revenue reaching $807 million, outperforming the anticipated $792 million. The rise was attributed to a surge in political revenue.
TENGA also reported adjusted EBITDA of $270 million, exceeding the analyst's forecast of $248 million. This outperformance was credited to the higher revenue and the company's efforts to reduce costs. The analyst highlighted TENGA's robust financial position, noting a net leverage ratio of 2.8x at the end of the third quarter.
The company has demonstrated a commitment to rewarding shareholders, evidenced by a 10% dividend increase this year and a significant $650 million stock buyback program. Management has projected that between 40% and 60% of the company's free cash flow will be returned to shareholders over the coming two years, while aiming to maintain net leverage around 3.0x.
Despite a downward revision in the full-year EBITDA forecast to $938 million from the previous $971 million, primarily due to an anticipated decrease in political revenue in the fourth quarter, the analyst expressed confidence in the company's financial strategy. The new price target of $22 reflects the analyst's updated outlook based on TENGA's third-quarter performance and forward guidance.
In other recent news, TEGNA (NYSE:TGNA) Inc. has reported a decrease in total company revenue for Q2 2024, primarily due to subscriber losses and a weaker national advertising market. However, the company's local advertising sector, particularly its connected TV sales platform, Premion, showed resilience. The company also announced a multi-year broadcast rights agreement with the Dallas Mavericks, expanding the team's television reach to an estimated 10 million people in Texas.
In recent developments, TEGNA has seen significant changes in its management team. The company announced the upcoming departure of Senior Vice President and Chief Legal Officer Lauren S. Fisher, and the appointment of Jim Kizer as president and general manager of its Des Moines, Iowa stations WOI and KCWI. Furthermore, Lynn Beall, executive vice president and chief operating officer of media operations, will leave the company in mid-2025.
Benchmark has maintained a Buy rating on TEGNA, attributing the company's recent performance to the strength in political advertising and speculation regarding potential changes in the U.S. presidency.
The firm also noted TEGNA's strong free cash flow and capital return program as factors that could limit downside risk. The company maintains its adjusted free cash flow guidance of $900 million to $1.1 billion for 2024-2025.
InvestingPro Insights
TEGNA Inc.'s (NYSE: TGNA) recent financial performance and strategic initiatives align well with several key metrics and insights from InvestingPro. The company's P/E ratio of 7.97 suggests that the stock may be undervalued, particularly in light of Guggenheim's increased price target. This valuation perspective is further supported by an InvestingPro Fair Value of $21.73, which is significantly higher than the current trading price.
InvestingPro Tips highlight TEGNA's commitment to shareholder returns, noting that "Management has been aggressively buying back shares" and the company "Has maintained dividend payments for 54 consecutive years." These points corroborate the article's mention of TEGNA's $650 million stock buyback program and recent 10% dividend increase. Additionally, the tip indicating a "High shareholder yield" aligns with management's projection to return 40-60% of free cash flow to shareholders over the next two years.
The company's financial health appears robust, with InvestingPro Data showing that "Liquid assets exceed short term obligations," which supports the analyst's positive view on TEGNA's financial position. Moreover, the recent stock performance has been strong, with a 26.63% price total return over the last three months, reflecting investor confidence in the company's direction.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for TEGNA, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.