Shares of Tegna rallied almost 9% on Wednesday after the broadcasting and digital media company reported better-than-expected preliminary 4Q results and reinitiated its share repurchase program. Tegna is scheduled to report its 4Q results on March 1, 2021.
Tegna (TGNA) expects 4Q revenues to generate between $932 million and $937 million, reflecting a year-over-year increase of 34%-35%. Double-digit growth in sales reflects strong subscription revenues and benefits from political advertising, the company noted. The fourth-quarter revenue forecast range compared favorably to Street estimates of about $898 million.
For 2020, the company projects to report revenues of between $2.932-$2.937 billion, an increase of 27%-28% year-on-year. Analysts had been looking for $2.90 billion.
As for 2021, Tegna forecasted for subscription revenues to grow in the mid-to-high teen percentage. The company also has plans to implement $50 million in cost savings this year. (See TGNA stock analysis on TipRanks)
Additionally, Tegna announced that its board of directors has authorized the renewal of its share repurchase program which was suspended on March 20, 2019. The reinstatement of the program allows the company to buy back up to $300 million of its common stock over the next three years.
Following the preliminary results, Guggenheim analyst Currey Baker raised the stock’s price target to $19 (23% upside potential) from $17 and reiterated a Buy rating. In a note to investors, Baker wrote, “We have adjusted our estimates and now forecast $240m in share repurchases for 2021.”
The Street shows a consensus of a Moderate Buy on the stock, which is based on 3 Buys and 1 Sell. The average analyst price target of $17.67 implies upside potential of about 14.4% to current levels. Shares have lost 5.2% over the past year.