Investors have seen shares of iHeartMedia (IHRT) stock rise higher over the last couple of days, thanks to an analyst upgrade from Bank of America Securities’ Jessica Reif Ehrlich. Ehrlich bumped the stock up from an Underperform rating to a Neutral rating while increasing her share price target from $1 to $3. This represents a potential 20.48% upside for IHRT stock.
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The upgrade for IHRT stock saw the shares climb 8% higher after being revealed Tuesday morning. That builds on its 12-month gains of 39.6%. However, the stock is still down 4.87% since the start of the year.
What’s Powering the IHRT Stock Upgrade?
The Bank of America analyst changed her tune on IHRT shares following updates in its latest earnings report. One of the biggest factors behind this is iHeartMedia restructuring $4.1 billion of its debt, which represents approximately 80% of its outstanding term loans and notes. It’s also undertaking other initiatives that will result in cost savings of $150 million in 2025.
On top of that, the iHeartRadio operator provided 2025 revenue guidance that is above expectations. If all goes as planned, revenue growth will be flat year-over-year. While that might not seem positive, investors will note that the radio company won’t have advertising from the 2024 U.S. presidential election, amplifying its revenue next year.
Another of iHeartMedia’s outlooks for 2025 includes Adjusted EBITDA of $770 million. That represents a 3% increase compared to 2024. Yet again, traders will remember that the company expects this growth despite the lack of the same political environment in 2025.
Where Is IHRT Heading Next?
The 12-month consensus price target for iHeartMedia is $2.88 per share. That’s a good look for the company, as it reflects a potential upside of roughly 20.50% compared to its current value. The average rating for IHRT is Hold, with three Holds ratings assigned in the last two days.
