Goldman Sachs upgraded Sinclair Broadcasting (SBGI) to market outperform from market perform.
Analyst Richard Rosenstein says the first quarter was modestly ahead of his estimates. He notes the company is benefiting from improving ad trends. He raised the $223 million 2002 EBITDA (pro forma) estimate to $246.1 million, and upped the $243 million 2003 estimate to $266 million. He notes at the current price, shares are trading at 10.8 times the 2003 EBITDA estimate, a discount to its pure-play peers. He notes leverage still is high, but is coming down quickly through the Indianapolis asset sale and resumption of organic growth. S&P was concerned about leverage, and with it diminished -- plus the stock's modest valuation -- he upgraded the shares.