Nexstar Media Group falls amid sector rotation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 26 2024
0mins
Should l Buy NXST?
Source: SeekingAlpha
Nexstar Media Group Inc. shares fell 5.11% as the stock crossed below its 5-day SMA, indicating a bearish trend.
The decline in Nexstar's stock price comes amid sector rotation, as investors shift their focus towards technology and growth stocks, which have been performing well in the current market environment. This shift has led to a decrease in interest for media stocks like Nexstar, despite the overall market strength reflected in the Nasdaq-100 and S&P 500 indices.
As the market continues to favor sectors with higher growth potential, Nexstar may face further challenges in regaining investor confidence unless it can demonstrate strong performance or strategic initiatives to attract attention back to its stock.
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Analyst Views on NXST
Wall Street analysts forecast NXST stock price to rise
4 Analyst Rating
3 Buy
1 Hold
0 Sell
Strong Buy
Current: 178.820
Low
204.00
Averages
232.25
High
250.00
Current: 178.820
Low
204.00
Averages
232.25
High
250.00
About NXST
Nexstar Media Group, Inc. is a diversified media company with television broadcasting, television network and digital media assets operating in the United States. The Company produces and distributes engaging local and national news, sports and entertainment content across its television and digital platforms. The Company’s reportable broadcast segment includes television stations and related local websites that Nexstar owns, operates, programs or provides sales and other services to in various markets across the United States, NewsNation, a national cable news network, two owned and operated multicast networks and other multicast network services, and WGN-AM, a Chicago radio station. The other operating segments, The CW and digital businesses, focused on the national marketplace. The Company’s portfolio of digital assets, including its local TV station websites, The Hill and NewsNationNow.com. Its national television properties include The CW, NewsNation, Antenna TV, and Rewind TV.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Legal Challenges: A coalition of eight Democratic state attorneys general, including those from California, New York, and Colorado, has filed a similar lawsuit against the merger, reflecting widespread concerns about market competition and consumer interests, which may lead to stricter regulatory scrutiny.
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See More
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Judicial Decision: A U.S. judge has temporarily extended an order regarding the merger of TEGNA and a media company.
Duration of Extension: The extension of the order is set for an additional seven days.
See More
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- Upgrade Impact: Citi upgraded Nexstar to Buy, resulting in a more than 5% increase in its stock price on Friday morning, indicating market optimism regarding its future performance.
- Acquisition Integration Challenges: Nexstar completed its $6.2 billion acquisition of Tegna on March 19, but is facing legal pressure from DirecTV and eight state attorneys general, which has temporarily halted the integration process and may affect future synergies.
- Risk and Reward Analysis: Analyst Jason Bazinet noted that despite potential downside risks such as reduced synergies and lower sales multiples, the risk-reward ratio from current levels stands at 9:1, with a potential upside of $73.
- Target Price Adjustment: Citi lowered Nexstar's target price to $220, assuming the company sells stations covering 25 million homes without entering a recession, still implying a 17% upside, reflecting a cautiously optimistic market outlook.
See More
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- MSG Sports Upgrade: Seaport upgraded Madison Square Garden Sports from neutral to buy, citing a significant 57.5% trading discount versus intrinsic value, suggesting a potential appreciation ahead of the 2025-26 season, particularly with plans to spin off the Knicks and Rangers into standalone entities.
- ServiceNow Downgrade: UBS downgraded ServiceNow from buy to neutral due to weakened confidence in the software sector, projecting a decline in 2026 free cash flow to 15x, reflecting increased budget pressures on non-AI applications that could impact future performance.
- Shake Shack Sales Growth: Mizuho upgraded Shake Shack from neutral to outperform, anticipating upside in same-store sales for Q1, driven by strong demand and improved restaurant-level margins, indicating robust market momentum and growth potential.
- Nvidia Strong Performance: Raymond James reiterated a strong buy rating on Nvidia, based on favorable trends in its Asia supply chain, with suppliers receiving increased forecasts during the quarter, reinforcing Nvidia's position as a market leader.
See More
Democrats Challenge FCC Approval of Nexstar-Tegna Merger
- Merger Approval Controversy: Democratic senators criticized FCC Chairman Brendan Carr for approving the Nexstar-Tegna merger without a full commission vote, arguing that this violates antitrust rules and could lead to further consolidation of local news coverage, negatively impacting consumer rights.
- Legal Challenge Escalation: A federal judge in California has ordered Nexstar to pause its integration with Tegna due to a lawsuit filed by DirecTV on antitrust grounds, indicating strong market opposition to the merger and potentially delaying the integration process.
- Need for Policy Review: Senators emphasized that FCC decisions should be voted on by the full commission to ensure transparency and legality, reflecting concerns over the regulatory agency's power, which could influence future merger approval processes.
- Congressional Intervention Intent: As the appropriations process for the next fiscal year begins, lawmakers expressed their intention to use all tools available to rein in the FCC's authority, demonstrating strong dissatisfaction with the agency's actions and potentially leading to stricter regulatory policies.
See More
Trump Backs NXST-TGNA Merger Amid Regulatory Changes
- Merger Support Shift: President Trump publicly backed the NXST-TGNA merger in February after opposing it in November 2025, indicating a significant policy shift that could influence market expectations and confidence in the deal.
- FCC Rule Waiver: The Federal Communications Commission (FCC) approved the merger earlier this month and waived previous rules, highlighting the regulatory body's commitment to promoting competition and diversity, which may facilitate the merger's smooth progression.
- Market Sentiment Changes: Retail sentiment for NXST dropped from 'bullish' to 'neutral' over the past month, while TEGNA shifted from 'neutral' to 'bearish', reflecting investor caution regarding the merger's prospects, which could impact stock price volatility.
- Transaction Details: NXST plans to acquire TGNA in an all-cash deal valued at $6.2 billion, offering $22 per share, representing a 31% premium over TGNA's average share price in the 30 days prior, demonstrating strong acquisition intent towards the target company.
See More
California Judge Halts Nexstar-Tegna Merger Amid Antitrust Lawsuit
- Merger Halt Order: U.S. District Judge Troy L. Nunley issued a late Friday order to pause the Nexstar-Tegna merger due to an antitrust lawsuit filed by TPG-owned DirecTV, which argues that the deal could lead to more frequent programming blackouts and increased consumer prices.
- Merger Context: The $6.2 billion merger between Nexstar and Tegna was completed last week after receiving clearance from the Federal Communications Commission and the Department of Justice, but DirecTV's lawsuit introduces new legal challenges that could affect the operational model post-merger.
- Legal Challenges: A coalition of eight Democratic state attorneys general, including those from California, New York, and Colorado, has filed a similar lawsuit against the merger, reflecting widespread concerns about market competition and consumer interests, which may lead to stricter regulatory scrutiny.
- Next Steps: The judge has scheduled a court hearing for April 7 to determine whether to maintain the restraining order pending the outcome of a full trial, which could significantly impact Nexstar's integration plans.
See More
