NYT - My DCF Model Indicates That Lee Enterprises Is Worth More Than $24
- Lee Enterprises is a local news provider in close to 77 markets across 26 states in the US.
- In my view, as management converts the company into a digital player, revenue would trend north to double digits.
- iIn the last five years, the free cash flow was close to $60-$78 million. With this in mind, I will assume a free cash flow of close to $77 million.
- With an exit multiple of 5.25x FCF, I obtained a fair price of $24, which is the amount of money that Alden Global Capital is proposing. I believe that the offer is too low because Lee has always traded at 11x-18x FCF.
- The company is also quite undervalued. Under moderate assumptions and an exit multiple of 12x, my DCF model implied a valuation that could be equal to even $87 per share.
For further details see:
My DCF Model Indicates That Lee Enterprises Is Worth More Than $24