Analyst boosts estimates for LIN Media


Wells Fargo Securities analyst Marci Ryvicker had already said she saw upside from the guidance offered by LIN Media once the auto market gets back to normal. Now she’s reworked her financial estimates for LIN.

“While the current environment is choppy (for everyone – not just TVL [LIN’s stock symbol]), we were somewhat surprised at TVL’s core rev guidance for Q3 of -4% to flat, given that most other groups are implying a low single digit increase in core. Given the tone of the call, and the fact that mgmt is not incorporating any upside from auto (we hear $ could come back in Sept.), we think guidance is somewhat conservative. That said, we did lower our core ad revenue estimate to -2% from +2%, but our consolidated revenue estimate remains at $101M (high end of range) due to more retrans and digital than we had previously forecasted,” Ryvicker said in a research note.

Earnings per share for Q3 were only two cents, due to a one-time tax adjustment, which was below the seven cents that Ryvicker had forecast. She’s now increased her Q3 EPS estimate by two cents to seven cents and her Q4 estimate by four cents to 22 cents. All in all, that adds up to the same 34 cents of EPS she had been forecasting for 2011. But for 2012 the analyst has raised her EPS estimate by a dime to 75 cents.

What about M&A prospects?

“TVL is interested in acquisitions BUT at the right price. There are a lot of assets up for sale, and it sounds like TVL could be a buyer but only at the right price – we do NOT think NXST [Nexstar] is an option for them due to both the market size of NXST’s stations and the potential price. We do note that at the end of Q2, leverage stood at 4.3x v. 4.4x at 3/31 and a 6x covenant,” Ryvicker said.