Sinclair Broadcast Group ( NASDAQ: SBGI ) is 4.4% lower after a double downgrade at Wells Fargo, which cut estimates given the "severity" of revisions.
The bank cut Sinclair to Underweight from Overweight, and slashed its price target to $16 from $30 (now implying)
While the TV station owner's stock is inexpensive, "SBGI faces multiple pressures that we think are greater than TV Broadcast peers," Wells Fargo says. "We think 2023 will be tougher for the group, and SBGI is most at risk."
The biggest concern will be net retransmission revenues; those should be negative again in 2023, Wells Fargo says, and it's already below management's three-year guidance from a couple of months ago. The bank's subscriber churn estimate is also about 2% worse than management guidance.
In response it's cutting 2022-2023 EBITDA estimates by 4%, and giving an additional haircut of 2% to free cash flow estimates, following a 10% cut to those estimates on Monday.
Sinclair missed expectations on top and bottom lines with its Q3 earnings Wednesday . Dig into Seeking Alpha's transcript of the earnings call for more .
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Sinclair Broadcast dips 4% on double downgrade at Wells Fargo