Seeking Alpha bullish on Outfront

Seeking Alpha has published a bullish article on Lamar titled: “This Billboard REIT Has Plenty of Buzz.”  Analyst Brad Thomas gives the company a buy rating due to superior assets in prime, iconic locations and upside from potential cell/data leases .

Thomas notes that one of the benefits of out of home is modest capex.  He estimates that even with digital sign conversions, capexp is 3-5% of revenue for out of home versus 6-13% of revenue for most other forms of commercial real estate.  The only REIT sector with lower capex requirements is towers (2-3% of revenue).

Thomas includes a chart showing the advantages of out of home versus competing forms of media: a low CPM and no ad blocking.

Source: “This Billboard REIT Has Plenty of Buzz”, Seeking Alpha, April 24, 2017

Insider’s take:  Thomas seems to think that Outfront should trade at the same multiple as Lamar.  Insider isn’t so sure.  Lamar has lower leverage, higher margins and isn’t as dependent on short term transit contracts.


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