We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Hold Lamar (LAMR) Stock in Your Portfolio Now?
Read MoreHide Full Article
Lamar Advertising Company’s (LAMR - Free Report) efforts to upgrade its traditional static billboards to digital ones will support the company’s growth over the long run. However, such growth initiatives require huge capital outlays that might strain free cash-flow growth and margins.
In third-quarter 2019, Lamar reported adjusted funds from operations (FFO) per share of $1.62, surpassing the Zacks Consensus Estimate of $1.59. Net revenues came in at $457.8 million, which also outpaced the Zacks consensus Estimate of $453.2 million.
Results were supported by increase in both local and national advertising revenues. Further, same-unit digital revenues went up 6.9%.
Notably, digitalization, acquisitions and media market share shift are multiple growth drivers for the company. Lamar is aimed at digital deployment of around 350 units by the end of this year. This upgradation effort is anticipated to boost occupancy in its existing advertising displays while enabling the company to raise advertising rates.
Additionally, fragmentation in the advertising media industry and technological advancements in the outdoor segment are supporting the shift to outdoor advertising. Therefore, Lamar is expanding its footprint to tap growth opportunities, and expects total acquisitions worth $235-$240 million in the ongoing year. Such efforts augur well for the company’s long-term growth.
Robust balance-sheet sheet strength and liquidity position enable the company to pursue these opportunities. In fact, as of Sep 30, 2019, it had $345.4 million of liquidity. The company also has an at-the-market equity offering program in place to support its acquisition plans.
However, continued acquisition of outdoor advertising assets and portfolio upgradation has been escalating capital expenditures. In fact, the company expects total capital expenditure to flare up 8.8% year over year, for 2019. This might hamper Lamar’s financial performance.
Further, Lamar faces stiff competition from national players. Specifically, the company competes against larger peers with diversified operations, which have an advantage of cross-selling complementary advertising products to advertisers. This is expected to impair the company’s growth momentum.
Stocks to Consider
Cousins Properties Incorporated (CUZ - Free Report) currently carries a Zacks Rank of 2 (Buy). The Zacks Consensus Estimate for the ongoing year’s FFO per share climbed 1.4% to $2.94 in a month’s time.
Healthcare Realty Trust Incorporated (HR - Free Report) carries a Zacks Rank of 2, at present. The company’s FFO per share estimate for 2019 moved 1.2% north to $1.60 over the past week.
EastGroup Properties, Inc. (EGP - Free Report) also carries a Zacks Rank of 2, currently. The company’s FFO per share estimate for this year moved up to $4.94 over the past month.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Shutterstock
Should You Hold Lamar (LAMR) Stock in Your Portfolio Now?
Lamar Advertising Company’s (LAMR - Free Report) efforts to upgrade its traditional static billboards to digital ones will support the company’s growth over the long run. However, such growth initiatives require huge capital outlays that might strain free cash-flow growth and margins.
In third-quarter 2019, Lamar reported adjusted funds from operations (FFO) per share of $1.62, surpassing the Zacks Consensus Estimate of $1.59. Net revenues came in at $457.8 million, which also outpaced the Zacks consensus Estimate of $453.2 million.
Results were supported by increase in both local and national advertising revenues. Further, same-unit digital revenues went up 6.9%.
Notably, digitalization, acquisitions and media market share shift are multiple growth drivers for the company. Lamar is aimed at digital deployment of around 350 units by the end of this year. This upgradation effort is anticipated to boost occupancy in its existing advertising displays while enabling the company to raise advertising rates.
Additionally, fragmentation in the advertising media industry and technological advancements in the outdoor segment are supporting the shift to outdoor advertising. Therefore, Lamar is expanding its footprint to tap growth opportunities, and expects total acquisitions worth $235-$240 million in the ongoing year. Such efforts augur well for the company’s long-term growth.
Robust balance-sheet sheet strength and liquidity position enable the company to pursue these opportunities. In fact, as of Sep 30, 2019, it had $345.4 million of liquidity. The company also has an at-the-market equity offering program in place to support its acquisition plans.
Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 9.1%, as against the industry’s decline of 2.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, continued acquisition of outdoor advertising assets and portfolio upgradation has been escalating capital expenditures. In fact, the company expects total capital expenditure to flare up 8.8% year over year, for 2019. This might hamper Lamar’s financial performance.
Further, Lamar faces stiff competition from national players. Specifically, the company competes against larger peers with diversified operations, which have an advantage of cross-selling complementary advertising products to advertisers. This is expected to impair the company’s growth momentum.
Stocks to Consider
Cousins Properties Incorporated (CUZ - Free Report) currently carries a Zacks Rank of 2 (Buy). The Zacks Consensus Estimate for the ongoing year’s FFO per share climbed 1.4% to $2.94 in a month’s time.
Healthcare Realty Trust Incorporated (HR - Free Report) carries a Zacks Rank of 2, at present. The company’s FFO per share estimate for 2019 moved 1.2% north to $1.60 over the past week.
EastGroup Properties, Inc. (EGP - Free Report) also carries a Zacks Rank of 2, currently. The company’s FFO per share estimate for this year moved up to $4.94 over the past month.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>