Boston, MA 04/09/2014 (wallstreetpr) – Gray Television, Inc. (NYSE:GTN) provides television broadcast services. The company owns and operates about 85 primary and secondary channels in 30 markets.
The company’s shares are expected to gain more than 28 percent in the next 12 months, according to analysts at Wells Fargo (NYSE:WFC). The analyst upgraded their price target on the stock to $12 from $10 in the previous note. The performance of the company is also expected to improve over the next 12 months. Wells Fargo analysts upgraded their rating on the stock to “outperform” from “market-perform.”
An increasing number of Wall Street analysts are becoming bullish on the stock. Before the release of the Wells Fargo’s latest rating on the stock, analysts at Zacks also upgraded their view on Gray Television, Inc. (NYSE:GTN). The analysts upgraded the stock to “outperform”, up from “neutral.” Moreover, they assigned price target of $12.40 on the stock.
Why analysts are optimistic
Gray Television, Inc. (NYSE:GTN) is known to be undergoing restructuring in its business. The company is seeking to increase efficiency and achieve more growth. That is happening at a time when broadcast television operators are facing intense competition from Internet for advertisement revenue. That being the situation; the company is trying to take more costs and expenses control measures. Also, the company is inking more business deals aimed at boosting revenue.
Curbing of expenses and costs is expected to reduce cash burn. Diversified investment through merger and acquisitions is expected to improve revenue. However, the company is financially limited in the amount and scale of acquisitions it can make currently. This is particularly so due to the tepid business condition that broadcast television operators have fallen into in recent times due to competition.
Most recent financial performance
Gray Television, Inc. (NYSE:GTN) has a market value of $669 million. The company issued its fourth quarter results last month. Earnings per share in the quarter were 7 cents, missing consensus estimate of 10 cents per share for the quarter. However, during the quarter, the company held up nicely on revenue. Fourth quarter revenue came in at $95.6 million, beating consensus estimate of $84.7 million. The revenue growth in the quarter mirrored the ongoing efforts to improve market share and win more advertisement revenue.
Compared with the corresponding quarter in 2012, revenue in the last quarter increased by 25 percent while earnings per share increased by 2. In the current fiscal year, analysts currently expect Gray Television, Inc. (NYSE:GTN) to earn $1 per share.
