bullish
GTN Ltd - Cost out, utilisation recovery and capital management
SUMMARY
- RaaS is initiating coverage of media group GTN (ASX:GTN) with a base peer EV/EBITDA-derived valuation of $0.81/share, representing potential capital upside of 40% from the current share price, although we suggest premiums of 10% and 20% to the peer average are justified based on GTN's superior metrics.
- • GTN has seen improved adjusted EBITDA across FY23 (+13.5%) and FY24 (+15%) but the utilisation rate of advertising spots is still below pre-pandemic levels.
- We believe further improvements in utilisation together with some stock-specific cost reductions will drive EBITDA 31% higher in FY25, placing the group on very attractive multiples relative to peers.
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