After correctly predicting that Sinclair Broadcast Group would reinstate its dividend, Wells Fargo Securities analyst Marci Ryvicker has been studying the numbers and guidance from the company. She’s now raised her estimates for the TV group owner.
The resurgence of automotive advertising is a major factor cited by the analyst. Auto was up 37% in 2010 and is pacing up 18% in Q1. “Granted, SBGI does have the Super Bowl which skews this category but their tone on auto in general was positive, especially since auto is still well below where it was pre-recession,” Ryvicker said in a research report.
The analyst has upped her expectation of Q1 earnings per share (EPS) by two pennies to 20 cents and for full year 2011 to 90 cents from here previous projection of 84 cents. She also notes that Sinclair management talked about monetizing some of its non-broadcast holdings, which total $165 million. That’s a total of $2-3 per share in untapped equity value in her view.
So, Ryvicker has put a valuation range of $15-17 per share on Sinclair’s stock. It closed Thursday (2/10) at $11.78.
