Shares in Outfront Media (OUT) have increased by 38% year to date. The strong price performance can be attributed to good operating performance coupled with growth opportunities ahead.
Outfront specializes in out-of-home advertising displays. The industry is enjoying tailwinds as data points indicate favorable performance metrics in comparison to other advertising mediums excluding digital, which is still the dominant way to reach audiences.
We see shares in Outfront Media as slightly undervalued. Doing a market-implied expectation analysis, we see the market pricing in operating margins below the consensus view. We expect margin compression