iHeartMedia (IHRT) PT Lowered to $6 at Guggenheim

Guggenheim analyst Curry Baker lowered the price target on iHeartMedia (NASDAQ: IHRT) to $6.00 (from $7.00) while maintaining a Buy rating.

The analyst commented, "We are updating our model to reflect a slightly more conservative Multiplatform outlook for iHeart in 2024. Our revenue and EBITDA forecast for the full-year are $4.001bn (vs $4.044bn prior) and $894mm (vs $919mm prior), respectively. Our 4Q revenue and EBITDA estimates remain unchanged (and in line with guidance). We expect 2024 to benefit from 1) Multiplatform stabilization, 2) ongoing Digital growth, 3) $170mm of political (bias to the upside), and 4) a continued focus on cost controls. iHeart expects to receive ~$100mm net of tax in 2Q from the sale of BMI (link), and we forecast 2024 FCF of $288mm (or ~$1.90/share). Management has consistently reiterated their commitment to the long-term leverage target of ~4.0x (our model has IHRT at 5.0x by year-end). We expect BMI proceeds and FCF to be used for debt reduction (management has been taking out the 8.375% Senior Unsecured Notes at a discount to par). We believe recent weakness in IHRT shares is due to an overhang on radio broadly related to Audacy (AUDAQ) filing for bankruptcy protection (link). IHRT continues to generate positive FCF, has cash and liquidity of $213mm/ $625mm as of 3Q23, and no maturities due until 2026. PT is now $6 (previously $7)."

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