(Bloomberg) -- The ranks of well-funded political hopefuls vying for the nation's top office is poised to benefit the local broadcast industry in a year set to reach record levels. But one of the nation's regional television station operators stands to reap the most.
According to Wells Fargo, “billionaire candidates and a highly charged partisan presidential race are likely most beneficial” to Nexstar Media Group. The Irving, Texas-based owner of regional broadcast networks “is potentially more exposed than peers to presidential spending,” which could help the company beat revenue expectations and drive the stock to further gains, Steven Cahall, a senior media analyst, wrote in a morning note.
Nexstar rose to a record intraday high Tuesday, climbing as much as 6.9% intraday to trade $124.15 a hand as of 12:18 p.m. in New York. Wells Fargo raised its price target on the stock by $36 to $149 per share while upgrading the stock to overweight from equal weight.
The bullish commentary doubles down on the notion that the current political environment can boost revenue at a time when consumers are ditching traditional media for a la carte streaming options. Local TV broadcasters are estimated to generate about $3.5 billion of incremental revenues from the 2020 political ad market, according to a study by data analytics firm Magna Global.
Read more: 2020 Candidates ‘Flush With Cash' Bode Well for Local TV Owners
Guggenheim also tipped off clients last month, saying Nexstar, alongside Gray Television Inc., was primed to rake in the most from candidates spending on the small screen to boost their own political prospects. Both companies own stations in competitive states such as Iowa.
(Michael Bloomberg, who is seeking the Democratic presidential nomination, is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)
To contact the reporter on this story: Kamaron Leach in New York at kleach6@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Courtney Dentch
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