On Thursday, Guggenheim Securities adjusted its outlook on TEGNA Inc. (NYSE:TGNA), reducing the price target to $20 from the previous $21 while sustaining a Buy rating on the stock. This adjustment follows the company's fourth-quarter earnings release and the provision of new guidance.
TEGNA reported a fourth-quarter revenue of $726 million, which was slightly below Guggenheim's projection of $742 million. The shortfall was attributed to decreased distribution and political revenue. However, the company's adjusted EBITDA for the quarter was $177 million, aligning closely with the firm's estimate of $179 million.
The company's financial position remains robust, with a net leverage ratio of 2.8 times at the end of the quarter. Reflecting this strength, TEGNA announced a new $650 million share repurchase authorization. This comes after the company had already bought back approximately 50 million shares, accounting for 22% of outstanding shares, under two Accelerated Share Repurchase (ASR) authorizations last year.
TEGNA's management has expressed intentions to return between 40% and 60% of its Free Cash Flow (FCF) to shareholders over the upcoming two years. This plan is set to be executed while maintaining a net leverage ratio of around 3.0 times.
The revision in Guggenheim's price target to $20 is based on the firm's lowered EBITDA forecasts for TEGNA. Guggenheim now anticipates the company's EBITDA to reach $1.06 billion in 2024, a decrease from the previously estimated $1.14 billion.
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