Gains national scale. The company will leap frog into the big leagues covering 36% of US TV households, without the UHF discount rule, upon the planned purchase of Meredith's TV group. The purchase price of $2.7 billion represents 7.9 times blended 2019/2020 cash flow, after synergies, a reasonable price, in our view. The deal is expected to close year end 2021.Move viewed favorably. The Meredith stations dovetail nicely with the company's existing stations and creates significant scale in many States, including Nevada, Arizona, Missouri, positioning it well for Political advertising. The company plans to sell only one overlap station in Flint, MI, to expedite regulatory approval, which is expected. Debt appears manageable. The company is expected to complete the transaction with a combination of debt and cash, increasing its leverage to 5.3 times trailing two year blended cash flow. Given the higher debt levels, we are lowering our financial assessment a notch from 3.5 to 3.0, still considered to be above average. The transaction is expected to be accretive to free cash flow. First quarter results slightly better. Q1 revenue of $544.0 million was in line with our $529.0 million estimate, with the largest upside variance due to Political and Local advertising. Cash flow, as measured by adjusted EBITDA of $168.0 million was above our $132.0 million estimate. The company will host a conference on Thursday at 11am ET to discuss the results and outlook. The conference call number is 855.493.3489, with conference code 6866269. Is there a peer gap? Near current levels, the shares trade at 8.0 times Enterprise Value to blended 2021 cash flow, or a sizable discount its peer group valuation, highlighted in this report. We believe that the gap between its valuation and its peer group should narrow given that the company will be among the league of the "super" broadcast groups and has further acquisition fueled growth prospects. We rate the GTN shares Outperform with a $30 price target. Read More >>