Sinclair Earnings: Upcoming Affiliate Renewals and 2024 Political Revenue Won’t Change Our Outlook

While revenue and profitability exceeded management expectations, Sinclair’s third-quarter earnings continued to display a middling core business. In the absence of election-year political ad spending, total revenue fell 9% to $767 million year over year. Excluding political ads, revenue was flat versus a year ago, as a 3% decrease in distribution revenue offset a 1% increase in core advertising sales. Although uncertainty remains surrounding affiliation renewals, the short-term economic headwinds that have made advertisers hesitant to spend have started to subside. This stabilization provides some positive news, as 2024 is expected to bring record-breaking political ad spending. We are maintaining our $15 fair value estimate.