Sinclair is expected to post higher earnings for the year as political ad spending continues to balloon.
The station group on Thursday disclosed that it now expects political ad spending to be between $442 million and $469 million for the year, an increase of about $60 million. Sinclair’s initial forecast way back when was for $350 million in political spending, which would have been 20% above 2020’s level.
For Q3, ad revenue is expected to range from $149 million to $145 million, up from the previous estimate of $113 million to $128 million.
Benchmark analyst Daniel Kurnos, who already had a “buy” rating for Sinclair stock, said in a note Monday he was increasing his estimate for Sinclair’s 2024 earnings before interest, taxes, depreciation and amortization (EBITDA) by $17 million as a result of the increase in expected political spending.
“In theory, incremental political dollars ought to be very high margin,” Kurnos said. With Sinclair’s new yield-optimization efforts, core looks to be impacted only by a point or two in 3Q, with growth of 2% to 4% still projected.”
Sinclair’s announcement also provided positive comments about the company’s round of retransmission consent renewals, which it said should yield 2% compounded annualized growth in net retrans for 2023-25.
That “should point to a successful refinancing in the near-term, lifting one of the biggest overhangs and paving the way for significant debt reduction over the medium term,” Kurnos said.
Sinclair stock traded down almost 1% at $14.51 a share in morning trading Monday.
