SBGI: Initiate Buy Trade Rating/$47 Price Target

We are initiating a Buy Trade Recommendation on Sinclair Broadcasting (SBGI) with a $47 12-month price target, ~50% upside. (Link)

Three key points to our thesis: 

1. We believe concern over CMCSA negotiations are overblown; 
2. Estimates are de-risked after removal of DISH from FCF guidance; 
3. Per consensus, company should generate $17 in FCF/share in 4Q19 and 2020, much of which should accrete to equity holders assuming company de-levers and EV/EBITDA multiple is unchanged.

Originally published on 02/05/20.