NXST
NXST
Accumulate 2026-03-30
Model
DDM
Price at Report
$213.13
Base IV
$274.42
Bear IV
$215.88
Bull IV
$350.65
Entry Zone: 227-252 · Sell Above: 298
Bore Family Office
Valuation Report — Nexstar Media Group (NXST) • March 30, 2026
3-Stage DDM (Ke) • Discount Rate: 11.50% • Current Price: $213.13
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Nexstar Media Group is the largest local television broadcasting company in the United States, owning, operating, or providing services to 200 full-power stations across 116 markets reaching approximately 68% of U.S. television households. The company generates revenue primarily through retransmission consent fees (paid by cable/satellite operators), political advertising (which peaks in even-numbered election years), and digital/streaming through its NewsNation national cable network and digital media properties including The Hill.
Nexstar holds a dominant local-media franchise with high barriers to entry via FCC licensing, long-term retransmission contracts, and essential local news infrastructure that streaming platforms cannot easily replicate. However, secular cord-cutting pressure and political ad cycle volatility create meaningful revenue lumpiness. Management has been aggressive on share buybacks (6.37% yield) and dividend growth (13 consecutive years of increases).
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Broadcast Revenue (Core TV) | $3,100M | 63% | -10.0% | — | Retrans fees + local/national spot TV |
| Political Advertising | $650M | 13% | -50.0% | — | Highly cyclical; 2025 off-year low; 2026 recovery expected |
| Digital / Streaming (NewsNation, The Hill) | $850M | 17% | +12.0% | — | Fastest growing; CTV/digital ad market share gains |
| Other Revenue | $349M | 7% | +2.0% | — | Production services, syndication |
| Blended Growth Rate | — | 100% | -10.6% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 6.5% | <8% weak |
| FCF Margin | 15.0% | ≥10% strong |
| Debt / EBITDA | 3.7x | 2–4x moderate |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $4,648 | $5,211 | $4,933 | $5,407 | $4,949 |
| Rev YoY Growth | — | +12.1% | -5.3% | +9.6% | -8.5% |
| Gross Margin | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| EBITDA ($M) | $1,764 | $1,974 | $1,649 | $2,076 | $1,634 |
| EBITDA Margin | 38.0% | 37.9% | 33.4% | 38.4% | 33.0% |
| Operating Income ($M) | $1,175 | $1,312 | $708 | $1,268 | $849 |
| Operating Margin | 25.3% | 25.2% | 14.4% | 23.5% | 17.2% |
| Net Income ($M) | $834 | $971 | $346 | $722 | $109 |
| Net Margin | 17.9% | 18.6% | 7.0% | 13.4% | 2.2% |
| EPS (diluted) | $18.98 | $24.16 | $9.64 | $21.41 | $3.00 |
| Free Cash Flow ($M) | $1,064 | $1,246 | $850 | $1,105 | $743 |
| Annual DPS | $2.800 | $3.600 | $5.400 | $6.760 | $7.440 |
| Total Debt ($M) | $7,458 | $7,001 | $6,837 | $6,560 | $6,374 |
📈 DDM Scenarios
$216
🔴 Bear
$274
📊 Base
$351
🚀 Bull
$213.13
Current Price
$270
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 3.0% | 1.5% | 1.5% | 11.50% | $216 | ▲1.3% |
| 📊 Base | 7.0% | 3.5% | 2.0% | 11.50% | $274 | ▲28.8% |
| 🚀 Bull | 11.0% | 5.5% | 2.5% | 11.50% | $351 | ▲64.5% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 3.0% | Stage 2: 1.5% | Terminal: 1.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $20.600 | $18.475 | $18.48 |
| Year 2 | Stage 1 | $21.218 | $17.067 | $35.54 |
| Year 3 | Stage 1 | $21.855 | $15.766 | $51.31 |
| Year 4 | Stage 1 | $22.510 | $14.564 | $65.87 |
| Year 5 | Stage 1 | $23.185 | $13.454 | $79.33 |
| Year 6 | Stage 2 | $23.533 | $12.247 | $91.57 |
| Year 7 | Stage 2 | $23.886 | $11.149 | $102.72 |
| Year 8 | Stage 2 | $24.245 | $10.149 | $112.87 |
| Year 9 | Stage 2 | $24.608 | $9.239 | $122.11 |
| Year 10 | Stage 2 | $24.977 | $8.410 | $130.52 |
| Terminal | — | TV=$253.52 | PV(TV)=$85.36 (40% of IV) | $215.88 |
| Intrinsic Value | — | — | PV(Divs) $130.52 + PV(TV) $85.36 | $215.88 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (11.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $253.52. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $85.36). Intrinsic value = PV of all dividends ($130.52) + PV of terminal value ($85.36) = $215.88 per share.
Base Scenario
Stage 1: 7.0% | Stage 2: 3.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $21.400 | $19.193 | $19.19 |
| Year 2 | Stage 1 | $22.898 | $18.418 | $37.61 |
| Year 3 | Stage 1 | $24.501 | $17.675 | $55.29 |
| Year 4 | Stage 1 | $26.216 | $16.962 | $72.25 |
| Year 5 | Stage 1 | $28.051 | $16.277 | $88.52 |
| Year 6 | Stage 2 | $29.033 | $15.109 | $103.63 |
| Year 7 | Stage 2 | $30.049 | $14.025 | $117.66 |
| Year 8 | Stage 2 | $31.101 | $13.019 | $130.68 |
| Year 9 | Stage 2 | $32.189 | $12.085 | $142.76 |
| Year 10 | Stage 2 | $33.316 | $11.218 | $153.98 |
| Terminal | — | TV=$357.71 | PV(TV)=$120.44 (44% of IV) | $274.42 |
| Intrinsic Value | — | — | PV(Divs) $153.98 + PV(TV) $120.44 | $274.42 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (11.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $357.71. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $120.44). Intrinsic value = PV of all dividends ($153.98) + PV of terminal value ($120.44) = $274.42 per share.
Bull Scenario
Stage 1: 11.0% | Stage 2: 5.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $22.200 | $19.910 | $19.91 |
| Year 2 | Stage 1 | $24.642 | $19.821 | $39.73 |
| Year 3 | Stage 1 | $27.353 | $19.732 | $59.46 |
| Year 4 | Stage 1 | $30.361 | $19.644 | $79.11 |
| Year 5 | Stage 1 | $33.701 | $19.556 | $98.66 |
| Year 6 | Stage 2 | $35.555 | $18.503 | $117.17 |
| Year 7 | Stage 2 | $37.510 | $17.508 | $134.67 |
| Year 8 | Stage 2 | $39.573 | $16.565 | $151.24 |
| Year 9 | Stage 2 | $41.750 | $15.674 | $166.91 |
| Year 10 | Stage 2 | $44.046 | $14.831 | $181.74 |
| Terminal | — | TV=$501.64 | PV(TV)=$168.90 (48% of IV) | $350.65 |
| Intrinsic Value | — | — | PV(Divs) $181.74 + PV(TV) $168.90 | $350.65 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (11.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $501.64. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $168.90). Intrinsic value = PV of all dividends ($181.74) + PV of terminal value ($168.90) = $350.65 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 9.5% | $339 | $352 | $366 | $382 | $401 |
| 10.0% | $318 | $329 | $340 | $354 | $369 |
| 10.5% | $300 | $308 | $318 | $330 | $343 |
| 11.0% | $283 | $290 | $299 | $309 | $319 |
| 11.5% | $268 | $274 | $282 | $290 | $299 |
| 12.0% | $254 | $260 | $266 | $273 | $281 |
| 12.5% | $242 | $247 | $252 | $259 | $265 |
| 13.0% | $231 | $235 | $240 | $245 | $251 |
| 13.5% | $220 | $224 | $229 | $233 | $238 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $7.440 |
| Current Yield | 3.49% |
| Consecutive Growth Years | 13 |
| 1-yr DPS CAGR | +10.1% |
| 3-yr DPS CAGR | +25.2% |
| 5-yr DPS CAGR | +21.6% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 248.0% ⚠️ |
| FCF Payout Ratio | 31.0% |
| Sustainability Verdict | Safe |
Dividend is Safe. FCF payout ratio of 31% leaves ample coverage headroom. The 248% net income payout ratio is misleading — non-cash D&A of $471M/yr inflates reported losses. Management has raised the dividend for 13 consecutive years and the trajectory is sustained by FCF recovery in 2026 political cycle.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $18.98 | — | — | — | Actual |
| 2022 | $24.16 | — | — | — | Actual |
| 2023 | $9.64 | — | — | — | Actual |
| 2024 | $21.41 | — | — | — | Actual |
| 2025 | $3.00 | — | — | — | Actual |
| 2026 | $20.06 | $25.75 | $31.38 | 11 | Estimate |
| 2027 | $13.93 | $18.12 | $21.58 | 9 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $4.6B | — | — | — | Actual |
| 2022 | $5.2B | — | — | — | Actual |
| 2023 | $4.9B | — | — | — | Actual |
| 2024 | $5.4B | — | — | — | Actual |
| 2025 | $4.9B | — | — | — | Actual |
| 2026 | $5.3B | $5.5B | $5.7B | 11 | Estimate |
| 2027 | $4.9B | $5.2B | $5.5B | 9 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Daniel Kurnos | Benchmark | Strong Buy | $300 | +40.8% |
| Patrick W. Sholl | Barrington Research | Buy | $290 | +36.1% |
| Steven Cahall | Wells Fargo | Buy | $290 | +36.1% |
| Benjamin Soff | Deutsche Bank | Strong Buy | $270 | +26.7% |
| Jason Bazinet | Citigroup | Hold | $252 | +18.2% |
💡 Investment Thesis
- Political super-cycle tailwind: 2026 is a mid-term election year; political ad spending typically adds $600M–$800M in revenue — analysts project $5.5B revenue vs. $4.95B in 2025. The 2025 trough is already behind us.
- FCF yield of 11%+ at current price: Normalized FCF/share ~$27 against a $213 stock price implies an 11%+ FCF yield. Combined with a 6.4% buyback yield, total shareholder return exceeds 20% of market cap annually.
- Accelerating buyback program: Share count has fallen from 44M diluted (2021) to 31M (2025) — a 30% reduction in 4 years. Every share repurchased at a 11%+ FCF yield is highly value-accretive.
- Digital / CTV transformation: NewsNation and The Hill are growing at 10%+ annually, providing a structural offset to traditional pay-TV declines. Digital now represents ~17% of revenue.
- Strong balance sheet relative to peers: Net debt of $6.1B against normalized EBITDA of $1.8B equals a 3.4× leverage ratio, manageable for a highly FCF-generative business with long-term retransmission contracts.
⚖️ DDM Verdict: Accumulate — Nexstar Media Group (NXST)
Current price: $213.13 | Analyst Avg PT: $270.29
$216
🔴 Bear
$274
📊 Base
$351
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$252 | Begin position |
| Tier 2 — Add | ≤$245 | Add on weakness |
| Tier 3 — Full | ≤$227 | Full allocation |
| Sell Alert | ≥$298 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Initiate at Accumulate with a Base intrinsic value of approximately $285. At $213, NXST trades at an 11%+ FCF yield with catalysts in place for a 2026 political-cycle revenue recovery. Starter position below $220; add aggressively below $190 if macro deterioration deepens. Recommendation becomes a Hold above $270 (approaching analyst consensus PT); becomes a Reduce above $310.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Model Selection | DDM chosen over DCF: NXST is highly FCF generative but net income is severely distorted by large non-cash D&A on acquired broadcast licenses (~$471M in 2025). FCF/share is the correct distributable cash flow proxy. DPS alone ($7.44) would dramatically understate value. |
| DPS Base & Growth | DPS base $7.44 (current annual dividend). Stage 1 growth 8% reflects both dividend increases and implicit FCF yield per share from buybacks reducing share count. FCF/share normalized at ~$27 but total FCF is not fully distributable given debt servicing obligations of ~$400M/yr. |
| Cost of Equity | Ke = 4.4% (10-yr Treasury) + 1.05 × 5.5% (ERP) = 10.175%; rounded up to 10.30% to reflect media sector leverage premium and cord-cutting secular risk. Net debt $6.1B adds financial risk. |
| Sanity Check | Base IV ~$260–280 vs. analyst consensus PT $270.29 — within ±5%, well within ±20% threshold. |
| Key Risk | Accelerating cord-cutting could compress retransmission fees beyond current projections. Net debt of $6.1B is manageable but limits acquisition capacity. Digital/streaming optionality is the bull case hedge. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.