Meredith Corporation operates in two segments, Local Media and National Media, which publishes approximately 21 subscription magazines that include Better Homes and Gardens, Parents, Family Circle, Allrecipes, EveryDay with Rachael Ray, and FamilyFun, as well as approximately 120 special interest publications under approximately 80 titles. The company was founded in 1902 and is based in Des Moines, Iowa.
MDP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Meredith Corp. To summarize, we found that Meredith Corp ranked in the 61th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Meredith Corp ended up being:
20% of the company's capital comes from equity, which is greater than merely 6.88% of stocks in our cash flow based forecasting set.
Meredith Corp's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -2.03. This coverage rate is greater than that of merely 17.63% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 16. This value is greater than 95.3% stocks in the Consumer Cyclical sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
LCII, NLS, GES, ETH, and SQBG can be thought of as valuation peers to MDP, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Publishing house Meredith has dropped its $1 million lawsuit against Maven, the operator of Sports Illustrated. “We dismissed our suit as we have come to an agreement with them that we are satisfied with,” said a spokeswoman for Meredith. Meredith sold Sports Illustrated to licensing giant Authentic Brands Group for $110 million in May 2019,…
Recommendation Meredith Corporation's (MDP) stock price has been decimated since the acquisition of Time Inc. The stock has dropped over 75% since the release of FY19 earnings, and it became clear the acquisition had destroyed value. In addition, the pandemic added to its woes as the advertising world hit a...
Matt Nicholson Lewis, CFA on Seeking Alpha | September 19, 2020
Publishing and broadcasting giant Meredith — which until now has relied on pay cuts to weather the pandemic — said it will cut 180 employees, or about 3.6 percent of its workforce, from its 17 TV stations and its magazine division, which includes People and Better Homes & Gardens. “While we’re seeing slight improvement, advertising…
NEW YORK and BIRMINGHAM, Ala., Sept. 16, 2020 /PRNewswire/ -- Meredith Corporation's (NYSE: MDP) Southern Living today reveals this year's Idea House, a modern farmhouse-style hideaway located in Asheville, in the mountains of North Carolina. The cover story of the October issue of…
Look, the media are trapped by changes in the technology and business of their industry. − David Frum As of Q2 2020, Meredith Corporation’s (MDP) content was read by more than 120 million women in the U.S. That’s about 95% of all women in our country, a huge number. MDP...
Michael A. Gayed, CFA on Seeking Alpha | September 15, 2020