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Zacks Investment Ideas feature highlights: Nexstar Media Group and The E.W. Scripps

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For Immediate Release

Chicago, IL – February 23, 2022 – Today, Zacks Investment Ideas feature highlights Nexstar Media Group, Inc. NXST and The E.W. Scripps Co. SSP.

The Disinformation Effect: Media Companies Soar on Growth Prospects

A hot investing topic in recent years has been the consideration of environmental, social, and governance (ESG) factors as part of the investment process. ESG-sensitive investors incorporate relevant data into their portfolio process in order to gain a more complete understanding of the companies in which they invest.

Numerous key trends have emerged as a result of the ESG movement. A relatively broad framework, ESG covers a host of issues from climate change to social unrest. Regardless of the specific issue, at the heart of the movement is the controversy surrounding investing in companies that are considered to be a threat to a sustainable, corruption-free, and environmentally-friendly world that takes into account the overall well-being of society.

The two media companies we will analyze below fall under the ‘social’ component of the ESG framework. Media companies in general have been targets of the movement, as the effects of disinformation have been felt worldwide. The COVID-19 pandemic added fuel to the fire, with ‘fake news’ and confusion causing mass hysteria over the past few years. The public at large dreads disinformation because it shakes the democratic foundations of our society and threatens individual psychological health.

In regards to our analysis, we are not making any claims with respect to these individual companies. We are simply laying out a risk that encompasses the entire media space. On the other hand, these two media firms are experiencing stellar growth and are outperforming the market. Both stocks are well in the green this year while the market has been in pullback mode. It is up to each individual investor to weigh the pros and cons and decide for themselves if certain investments are appropriate for their specific situation.

Nexstar Media Group, Inc.

Nexstar Media Group is a television broadcasting and digital media firm that operates in eleven U.S. states. NXST focuses primarily on the acquisition, development, and operation of TV stations, online websites, and digital media services domestically. Its stations are affiliates of ABC, NBC, CBS, FOX, as well as other broadcast networks. Nexstar Media Group was founded in 1996 and is headquartered in Irving, TX.

NXST has surpassed earnings estimates in seven of the past eight quarters. Earlier today, the media services provider reported Q4 EPS of $6.19, beating the Zacks Consensus Estimate of $4.87 by 27.1%. Revenues of $1.25 billion also topped expectations. NXST has delivered a trailing four-quarter average earnings surprise of +20.52%, aiding the stock’s 39.6% return over the past year. Shares have advanced over 17% to kick off the new year.

NXST trades at a relatively undervalued 6.77 forward P/E which compares favorably to that of its industry (12.32). As the media firm looks ahead into 2022, earnings and revenue projections appear promising. The Zacks Consensus Estimate for ’22 EPS stands at $25.87, translating to growth of 47.17% relative to last year. Sales are expected to rise 13.24% to $5.25 billion.

The E.W. Scripps Co. 

The E.W. Scripps Company functions as a media enterprise via a portfolio of local and national media brands. SSP serves audiences and businesses through a versatile offering of television, print, and digital media brands. The company is one of our nation's largest independent television station owners, operating through a network of 61 different TV stations. In addition, SSP operates an expanding collection of local and national journalism and information businesses, including online multi-source news provider Newsy. The E.W. Scripps Company was founded in 1878 and is based in Cincinnati, OH.

SSP has strung together a notable history of positive earnings surprises, exceeding estimates in each of the past six quarters. The media provider most recently reported Q3 EPS back in November of $0.23, a +91.67% surprise over the $0.12 consensus. SSP has posted an average earnings surprise of +215.7% over the past four quarters. The stock has started off the new year on a positive note, with shares climbing over 13% at the time of this writing.

Despite the impressive run, SSP remains relatively undervalued (6.05 forward P/E) when compared to its industry (12.32). Analysts are anticipating phenomenal progress this year as the Zacks Consensus Estimate for 2022 EPS sits at $3.64. This represents growth of 191.2% versus the $1.25 estimate for last year. SSP is scheduled to report its Q4 results later this week on February 25th.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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