A report on The Motley Fool web site noted a significant Monday increase in the share price and volume of trades for Outfront Media.  This chart shows that Outfront stock has surged over the past five days.

Volume has been high as well.

The movement is reported to be based on an announcement from Outfront that they have been recommended by the New York Metropolitan Transportation Authority to be awarded the transit concession agreements  for subway, commuter rail and buses.  Finalizing the agreement is subject to the approval of the MTA Board of Directors.

Outfront is the incumbent provider on these three licenses and an award of a new 10 year license with an option for an additional 5 years is a big win for the Company.  With the MTA carrying 11 million passengers a day, Outfront generated $225.1 million of revenue from the MTA licenses, representing nearly 15% of the company’s total revenue in 2016.

Insider’s take:  The MTA contract was a long time in coming and should be a plus for Outfront. Will be interesting to see the details of the contract and any fixed minimum payments to the MTA.  Large competitive transit contracts normally include fixed minimums. If they get too expensive it can impact profitability in a recession when revenues typically drop.  It’s been 8 years since the last recession and the longest we’ve gone between recessions since World War II is 10 years.

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