Lamar Advertising Co. (LAMR): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Lamar is one of the largest owners and operators of outdoor advertising structures in the U.S. Lamar reported lackluster first quarter 2014 results with year-over-year improvement in revenues and narrower loss. Lamar has registered higher sales of advertising space with an increase in occupancy of its existing advertising displays and acquisition of newer ones. The company also has ample liquidity to fuel its growth engine. However, Lamar faces increased headwinds in the form of rising operating expenses and competitive pressures. We are changing our recommendation for Lamar from Neutral to Outperform, largely driven by rising earnings estimates on the back of its approval for REIT conversion.

Overview:

Headquartered in Baton Rouge, Louisiana, Lamar Advertising Company is one of the largest owners and operators of outdoor advertising structures in the U.S. Although the company was founded in 1902, Lamar has been publicly trading on NASDAQ since 1996. It provides advertising services to restaurants, retailers, automotive, real estate, health care, gaming, service, hotel and motel, telecommunication, and amusement industries, including entertainment and sports. Lamar together with its subsidiaries provides outdoor advertising services in the United States, Canada, and Puerto Rico.

Lamar has a single operating and reportable segment, namely advertising. The company offers three types of outdoor advertising displays: 1) billboards, 2) logo signs, and 3) transit advertising displays. Lamar sells advertising space on two types of billboards: bulletins and posters. Bulletins are generally large, illuminated advertising structures and are typically located on major highways and target vehicular traffic spots. On the other hand, posters are relatively smaller than bulletins and are located on major traffic arteries, city streets, and targeted vehicular and pedestrian traffic spots. In addition to traditional billboards, Lamar also offers digital billboards, which are usually located on major traffic arteries and city streets.

Logo signs are normally located near highway exits, nearby gas, food, camping, lodging and other attractions. Transit advertising displays are advertising spaces sold on the exterior and interior of public transportation vehicles, transit shelters and benches.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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