What Happened?
Shares of local television broadcasting and media company Gray Television (NYSE: GTN) jumped 17.6% in the afternoon session after the company reported decent first quarter 2025 results which included a significant EPS beat and EBITDA that outperformed estimates. Sales dropped 5%, dragged by weak political and retransmission revenue, though gains from production companies and digital ads helped soften the blow. Zooming out, we think this was a mixed print.
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What The Market Is Telling Us
Gray Television’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. But moves this big are rare even for Gray Television and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 17 days ago when the stock dropped 6.1% on the news that President Trump criticized the Federal Reserve's approach to interest rate cuts, warning that the pace was slow and could hinder economic growth. Trump's comments added pressure to an already sensitive market, raising concerns about political interference in monetary policy.
Meanwhile, Fed Chair Jerome Powell maintained a cautious stance the previous week, highlighting the difficulty of balancing the dual mandate of steady employment and price stability amid the escalating trade tension. Investor sentiment was further dampened by the absence of constructive progress in trade negotiations, especially US-China relations which took a turn for the worse in the previous week. Overall, the outlook seemed more unclear heading into the first quarter 2025 earnings season, as a combination of hard to predict monetary policy and unresolved trade tensions weighed on business confidence.
Gray Television is up 31.2% since the beginning of the year, but at $4.40 per share, it is still trading 38.4% below its 52-week high of $7.13 from May 2024. Investors who bought $1,000 worth of Gray Television’s shares 5 years ago would now be looking at an investment worth $334.22.
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