TEGNA Inc Gets a Buy Rating from Benchmark Co.

By Austin Angelo

In a report released today, Daniel Kurnos from Benchmark Co. reiterated a Buy rating on TEGNA Inc (NYSE: TGNA), with a price target of $20. The company’s shares closed yesterday at $15.05.

Kurnos noted:

“We understand that new CEO David Lougee threw cold water on the idea of selling the Company at their analyst day in May, but pressure from shareholders and possible interest from Gray (GTN:Buy) and/or Nexstar (NXST: Buy) could lead to all options being put on the table. With Sinclair locked up for the next 12 months, the only acquirer of size would appear to be Nexstar. However, given increasingly open rhetoric around needing to participate more aggressively in the M&A environment from Gray Television, we wouldn’t be surprised to see a reverse merger attempt via a predominantly stock transaction. The big question, and possibly the biggest stumbling block, centers on potential synergies, as we believe the retrans gap between TGNA and NXST has likely closed to ~10% given the abundance of market deals (we would assume that gap is even smaller for Gray). With that said, we note that only 1/3 of the final synergies in Nexstar’s Media General transaction came from retrans, with the balance coming from OpEx improvements. In Nexstar’s case, while we believe there would be sufficient synergies, we would expect management to carefully weigh an acquisition of that magnitude vs. repurchasing their own stock, much like they did in evaluating Tribune. We would also expect any potential acquires with station overlap to wait to see how the DOJ handles any potential divestitures in SBGI-TRCO before making a bid.”

According to TipRanks.com, Kurnos is a 5-star analyst with an average return of 13.3% and a 59.0% success rate. Kurnos covers the Services sector, focusing on stocks such as Liquidity Services, Sinclair Broadcast, and 1-800 FlowersCom.

Currently, the analyst consensus on TEGNA Inc is Moderate Buy and the average price target is $25.50, representing a 69.4% upside.

In a report issued on June 6, Barrington also initiated coverage with a Buy rating on the stock with a $42 price target.

The company has a one year high of $17.07 and a one year low of $11.47. Currently, TEGNA Inc has an average volume of 4.24M.

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TEGNA, Inc. is comprised of a dynamic portfolio of media and digital businesses which provides content that matters and brands that deliver. It operates through Media, and Digital segments. The Media segment is refers to the sale of advertising time on the television stations. The Digital segment is consist of Cars.com; CareerBuilder; and G/O Digital businesses. The company was founded by Frank E. Gannett in 1906 and is headquartered in McLean, VA.