On Wednesday, Outfront Media (NYSE: NYSE:) saw its price target increased by TD Cowen from $16.00 to $17.00 while the firm kept a Hold rating on the stock. The adjustment follows Outfront Media’s recent quarterly financial results, where the company exceeded second-quarter profitability expectations, though it fell short on revenue.

Outfront Media’s management expressed optimism for the second half of 2024, with a particular focus on growth in digital and transit areas. This positive forecast has influenced the analyst’s decision to revise the price target upward. The expectation is that the company’s Board of Directors may choose to distribute a portion of the dividend from the sale of its Canadian business in the form of stock, which would enable Outfront Media to accelerate debt repayment.

The new price target of $17.00 is based on an increased forecast for the company’s full-year 2024 EBITDA (earnings before interest, taxes, depreciation, and amortization). Despite the changes in estimates, the valuation multiple applied by TD Cowen remains steady at 11 times EBITDA.

The analyst’s commentary provided insight into the rationale behind the price target change. “OUTFRONT posted a beat to 2Q profitability estimates despite a revenue miss. Management has a positive outlook for 2H24, particularly in digital and transit. We think the Board of Directors will opt to pay a portion of the dividend from the sale of the Canada biz in stock, allowing OUTFRONT to prepay more debt. Our PT increases to $17 on higher a FY24 EBITDA estimate and an unchanged 11x multiple.

InvestingPro Insights

Outfront Media’s recent performance and strategic moves have caught the attention of analysts and investors alike. The company’s management remains confident, particularly in the growth potential of digital and transit sectors. According to InvestingPro Tips, the stock is trading at a low earnings multiple, with a P/E ratio of 11.7, indicating potential value for investors. Additionally, the company is expected to be profitable this year, reinforcing the positive outlook.

InvestingPro Data further highlights the company’s financial health. Outfront Media boasts a robust gross profit margin of 47.58% over the last twelve months as of Q2 2024. Despite a modest revenue growth of 1.59% in the same period, the company offers a significant dividend yield of 8.52%, which could be particularly attractive to income-focused investors. Moreover, with a market capitalization of $2.56 billion and a price close to its 52-week high at 91.13%, Outfront Media demonstrates a strong market presence.

For investors seeking more in-depth analysis, there are additional InvestingPro Tips available that could provide further guidance on Outfront Media’s stock potential. These tips can be accessed through InvestingPro’s platform, offering a comprehensive look at the company’s financials and market position.

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