Gannett Co Inc (NYSE:GCI) shares were climbing in early trading on Monday.

The company has several catalysts for digital revenue growth and margin expansion, which should take the stock closer to peer average multiples, according to JMP Securities.

The Gannett Analyst: Matthew Condon initiated coverage of Gannett with a Market Outperform rating and a price target of $6.

The Gannett Thesis: Transitioning from a legacy news business to digital media should help the company to return to growth, Condon said in the initiation note.

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Gannett expects digital to reach 50% of total revenue in 2025, the analyst stated. "Key initiatives to drive digital revenue growth include its new content strategy, driven by data, optimization of subscription pricing, and product and vertical expansion within its DMS business," he added.

Gannett also has several new initiatives, including affiliate partnerships and data licensing negotiations, which could eventually represent a $100 million opportunity, Condon wrote.

The company is optimizing its cost structure and shifting its focus to high-value subscribers in digital, which is expected to generate a CAGR (compounded annual growth rate) in free cash flows of 40% from 2023 to 2026, he further added.

GCI Price Action: Shares of Gannett had risen by 2.60% to $4.73 at the time of publication on Monday.

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