Bank of America analysts have upgraded their rating on iHeartMedia (NASDAQ:IHRT) after the media and radio company announced an agreement to restructure its outstanding debt.
The company last week revealed it has entered into a transaction support agreement with a group of debt holders to refinance at least 80% of its outstanding term loan and notes to extend maturities by three years.
Importantly, the analysts highlighted, cash interest will be kept essentially flat and this will result in an overall debt reduction.
“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 bank’s analysts wrote in a note to clients.
The analysts see the agreement alongside better-than-expected calendar 2025 guidance leading to a more balanced risk-reward profile.
“While we await more concrete signs of a true inflection in the multi-platform group (and Broadcast radio) to get more constructive on shares, we also acknowledge the likely worst-case scenario has been removed in the near term,” they wrote.
They upgraded iHeartMedia to ‘Neutral’ from ‘Underperform’ and their price objective on the stock to $3 from $1.
The $3 price objective is based on the analysts’ revised 5.8x multiple, compared to 5.4x previously, calendar 2025 EBITDA forecast of $770 million, up from $738 million.
Shares of iHeartMedia traded hands at $2.48 in the early afternoon on Tuesday.