Shares of iHeartMedia Inc (NASDAQ:IHRT) have climbed almost 70% year to date.
The radio and podcasting company, which recently cut 5% of its workforce, is restructuring debt. This removed an overhang on its stock, according to Bank of America Securities.
Analyst Jessica Reif Ehrlich upgraded the rating for iHeartMedia from Underperform to Neutral, while raising the price target from $1 to $3.
The iHeartMedia Thesis: The company has entered into a "transaction support agreement with a group of debt holders" to refinance at least 80% of its outstanding debt and extend maturities by three years, Ehrlich said in the upgrade note.
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Cash interest will be kept "essentially flat," which will result in an overall debt reduction, she added.
"This removes a significant overhang for shares as the debt was approaching maturity, and there had been increased concerns regarding the company's ability to refinance their capital structure," the analyst wrote.
IHeartMedia now has "a longer runway" to continue growing its digital business. It can also manage its cost base, and rejuvenate its broadcast business, Ehrlich said.
The debt restructuring and better-than-expected 2025 guidance make the risk-reward "more balanced," Ehrlich said.
Price Action: Shares of iHeartMedia had risen by 0.60% to $2.50 at the time of publication on Tuesday.
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