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Here's Why OUTFRONT Media Stock is an Apt Portfolio Pick Now
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OUTFRONT Media’s (OUT - Free Report) well-diversified portfolio of advertising sites and large-scale presence bodes well. Its efforts to convert its business from traditional static billboard advertising to digital displays support its digital revenue growth. Strategic expansions in its digital billboard portfolio also provide scope to capitalize on long-term growth opportunities. However, competition from other advertising channels is likely to affect its pricing power.
What’s Supporting OUTFRONT Media?
OUTFRONT Media’s advertising sites are geographically diversified, with a presence across the largest markets in the United States, aiding in stable revenue generation. The large-scale presence enables its clients to reach a national audience and provides the flexibility to tailor campaigns to specific regions or markets. This out-of-home (“OOH”) advertising company provides communication and advertising services to several transit authorities and a wide array of industries. Hence, the company’s large-scale presence and diversified portfolio with respect to geography and industry make its revenues less volatile.
OUTFRONT Media has been making efforts to convert its business from traditional static billboard advertising to digital displays. This is helping expand the number of new advertising relationships, in turn, providing scope to boost digital revenues. Over the past few years, expansion efforts in new assets and technology are likely to drive the company’s revenue and operating income before depreciation and amortization (OIBDA) growth in the upcoming period.
OOH advertising has been growing at a rapid pace and continues to increase its market share compared with other forms of media. Importantly, the cost of advertisement through this medium is also comparatively lower than other media. Moreover, fragmentation across other advertising media and technological advancements in the OOH segment are aiding the shift to outdoor advertising.
OUTFRONT Media operates in an industry that is characterized by high barriers to entry due to permitting restrictions. As there is a control on the permits, inventory as well as an intrusion from other market players, both local and national, are restricted. This helps support advertising rates. Hence, OUT remains well poised to grow over the long term.
In the upcoming years, higher technology investments are expected to provide further support to OOH advertising. Capitalizing on this, the company is expanding its footprint and providing unique technology platforms to marketers to tap growth opportunities. OUTFRONT Mobile Network offers advertisers additional data-analytic features and helps draw more audiences. In addition, the company’s digital platform offers real-time geolocation audience data to advertisers. This will help advertisers channel their funds efficiently to OUTFRONT Media’s assets and is anticipated to serve as a major growth driver.
Over the past six months, shares of this Zacks Rank #2 (Buy) company have gained 19.5% against the industry's decline of 3.2%.
Image Source: Zacks Investment Research
However, the company faces competition from other outdoor advertisers for customers, display locations and structures. It also competes with mobile and social media advertising platforms and traditional advertising platforms. It also competes with a wide variety of out-of-home media, including advertising in shopping centers, airports, movie theaters, supermarkets and taxis. This is anticipated to affect the company’s pricing power in the market.
The Zacks Consensus Estimate for Welltower’s 2025 funds from operations (FFO) per share has been revised marginally northward over the past month to $4.79.
The Zacks Consensus Estimate for Cousins Properties’ 2025 FFO per share has been raised marginally over the past month to $2.74.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Here's Why OUTFRONT Media Stock is an Apt Portfolio Pick Now
OUTFRONT Media’s (OUT - Free Report) well-diversified portfolio of advertising sites and large-scale presence bodes well. Its efforts to convert its business from traditional static billboard advertising to digital displays support its digital revenue growth. Strategic expansions in its digital billboard portfolio also provide scope to capitalize on long-term growth opportunities. However, competition from other advertising channels is likely to affect its pricing power.
What’s Supporting OUTFRONT Media?
OUTFRONT Media’s advertising sites are geographically diversified, with a presence across the largest markets in the United States, aiding in stable revenue generation. The large-scale presence enables its clients to reach a national audience and provides the flexibility to tailor campaigns to specific regions or markets. This out-of-home (“OOH”) advertising company provides communication and advertising services to several transit authorities and a wide array of industries. Hence, the company’s large-scale presence and diversified portfolio with respect to geography and industry make its revenues less volatile.
OUTFRONT Media has been making efforts to convert its business from traditional static billboard advertising to digital displays. This is helping expand the number of new advertising relationships, in turn, providing scope to boost digital revenues. Over the past few years, expansion efforts in new assets and technology are likely to drive the company’s revenue and operating income before depreciation and amortization (OIBDA) growth in the upcoming period.
OOH advertising has been growing at a rapid pace and continues to increase its market share compared with other forms of media. Importantly, the cost of advertisement through this medium is also comparatively lower than other media. Moreover, fragmentation across other advertising media and technological advancements in the OOH segment are aiding the shift to outdoor advertising.
OUTFRONT Media operates in an industry that is characterized by high barriers to entry due to permitting restrictions. As there is a control on the permits, inventory as well as an intrusion from other market players, both local and national, are restricted. This helps support advertising rates. Hence, OUT remains well poised to grow over the long term.
In the upcoming years, higher technology investments are expected to provide further support to OOH advertising. Capitalizing on this, the company is expanding its footprint and providing unique technology platforms to marketers to tap growth opportunities. OUTFRONT Mobile Network offers advertisers additional data-analytic features and helps draw more audiences. In addition, the company’s digital platform offers real-time geolocation audience data to advertisers. This will help advertisers channel their funds efficiently to OUTFRONT Media’s assets and is anticipated to serve as a major growth driver.
Over the past six months, shares of this Zacks Rank #2 (Buy) company have gained 19.5% against the industry's decline of 3.2%.
Image Source: Zacks Investment Research
However, the company faces competition from other outdoor advertisers for customers, display locations and structures. It also competes with mobile and social media advertising platforms and traditional advertising platforms. It also competes with a wide variety of out-of-home media, including advertising in shopping centers, airports, movie theaters, supermarkets and taxis. This is anticipated to affect the company’s pricing power in the market.
Other Stocks to Consider
Some other top-ranked stocks from the REIT sector are Welltower (WELL - Free Report) and Cousins Properties (CUZ - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2025 funds from operations (FFO) per share has been revised marginally northward over the past month to $4.79.
The Zacks Consensus Estimate for Cousins Properties’ 2025 FFO per share has been raised marginally over the past month to $2.74.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.