With Nexstar Media Group’s stock price at its lowest level since mid-October, perhaps there is some belief that its shares represent a good value for investors.
Count Nexstar’s board of directors among those who may agree with this sentiment. It began Tuesday (5/1) by saying yes to an expansion of the broadcast TV company’s share repurchase program.
Now, the company is authorized to initiate up to an additional $200 million of repurchases of its Class A common stock.
The expansion brings the total capacity under Nexstar’s share repurchase program to approximately $252.4 million, when combined with the roughly $52.4 million remaining under its prior authorization as of Dec. 31, 2017.
“The expanded repurchase authorization reflects our confidence in the company’s growing free cash flow from operations and our commitment to allocating capital to repurchases, dividends, leverage reduction, select opportunistic accretive transactions and other purposes that can enhance shareholder value,” noted Perry Sook, Nexstar’s founder and President/CEO.
He added, “With the conclusion of the first quarter, Nexstar remains confident in meeting our target for average annual free cash flow of slightly in excess of $600 million for the 2018/2019 cycle, inclusive of our assumptions for a changing interest rate environment and our expectation that the company will become nearly a full tax payer in 2018.”
Nexstar will provide more details on May 9 with the release of its Q1 2018 results.
As of Dec. 31, 2017, Nexstar had approximately 46 million shares of Class A common stock outstanding.
Repurchases by Nexstar will be subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors.
Additionally, share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with the company’s finance agreements.
Nexstar anticipates funding any share repurchases from its cash flow from operations.
When will Nexstar make its next share repurchase? Now is a pretty good time to do so.
With its shares trading just below $63 a share, Nexstar is near its lowest price seen in 2018. That was on April 13, when NXST dipped to $62.35. It was $81.75 on January 19, capping an impressive climb from October 30, 2017.
That’s when Nexstar shares were $63.05 — slightly above where they start the first day of May.
Nexstar’s stock is expected to climb: It bears a 1-year target price of $95.20.
Plus, NXST goes ex-Dividend on May 10 — a big plus for shareholders.
The board’s OK of a widened stock buyback programs comes four days after Nexstar’s board approved a quarterly cash dividend of $0.375 per share of its Class A stock. The dividend is payable on Friday, May 25, to shareholders of record on Friday, May 11.