LAMAR ADVERTISING CO/NEW (LAMR): what the price requires
At today's price, LAMAR ADVERTISING CO/NEW (LAMR) is priced for +11.3% FFO growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/LAMR
Headline
| Field | Value |
|---|---|
| Ticker | LAMR |
| Company | LAMAR ADVERTISING CO/NEW |
| Current price | $156.77/sh |
| Composition | Billboard Advertising 89% / Logo Advertising 4% / Transit Advertising 7% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Implied FFO growth | 11.3% |
| Price-to-FFO | 17.4x |
| FFO yield | 5.7% |
Solve inputs: computed at a 10.5% cost of equity with 4% terminal growth over a 5-year stage; each 1pp of cost of equity moves the implied growth ~3.9pp.
Reconcile: at the x-ray's 9.3% required return this reads ~6.1%/yr; the models below use their own rates.
How unusual the bet is: extreme (limited comparison data)
| Reference | Value |
|---|---|
| cohort percentile (of 88 peers) | 80 |
| sustained it ~5 years at this level | 54% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.16x | 4 | expensive |
| Earnings | 4.64x | 5 | expensive |
| Relative | 1.34x | 6 | expensive |
| Growth | 1.19x | 4 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.2%); the inversion above states its own rate.
Per-Model Detail (n=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $129.21 | 1.21x | yes | FCF base $0.7B, growth 3% (input: historical growth), terminal g 3.4%, WACC 7.2%, 5yr projection |
| DCF Exit Multiple | Growth | $145.06 | 1.08x | yes | Exit EV/EBITDA: 26.5x / 28.5x / 30.5x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $182.22 | 0.86x | yes | P/E 27.97x (blended: static sector reference 35x + trailing (TTM) 17x), scenarios: 23.5x / 28.0x / 32.5x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $133.40 | 1.18x | yes | Stage 1: 7% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $58.58 | 2.68x | yes | BV/sh $9.56, ROE (TTM) 56.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $189.22 | 0.83x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $113.56 | 1.38x | yes | Rev $2.3B, growth 3% (input: historical growth; tapered), Terminal P/S: 5.8x / 6.9x / 8.1x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $108.00 | 1.45x | yes | FFO/share $9.00, growth 7% (input: historical FFO/share growth, 10y median), PEG=4.22 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $33.80 | 4.64x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.63B × (1−4%) / WACC 7.2% → EPV (no growth) |
| Residual Income | Asset | $95.77 | 1.64x | yes | BV $9.56 + 5yr PV of (ROE (TTM) 56.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $44.00 | 3.56x | yes | √(22.5 × FFO/share $9.00 × BVPS $9.56) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $95.36 | 1.64x | yes | EBITDA $0.73B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $26.22 | 5.98x | yes | FCF $699.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $22.54 | 6.96x | yes | SBC-adj FCF $0.67B (FCF $0.70B − SBC $0.03B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $167.60 | 0.94x | yes | FFO/share $9.00 × (8.5 + 2×6.9%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $3.16 | 49.61x | yes | BV $9.56 × (ROIC 2.4% / WACC 7.2%) (excluded from median) |
| P/Sales Sector | Relative | $135.36 | 1.16x | yes | Revenue $2.29B × sector P/S 6.0x |
| PEG Fair Value | Relative | $92.61 | 1.69x | yes | FFO/share $9.00 × (PEG 1.5 × growth 6.9% (input: historical FFO/share growth, 10y median)) → PE 10.3x |
| Earnings Yield | Earnings | $97.30 | 1.61x | yes | FFO/share $9.00 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $127.61 | 1.23x | yes | FFO/share $9.00 × 14.2x P/FFO (route cohort median, n=85); FFO $0.91B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 101M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $3.5b |
| Net debt / FFO | 3.80x |
| Fixed-charge coverage (FFO basis) | 6.7x |
| Funds from operations (trailing) | $913.1m |
| Share count CAGR (dilution) | 0.0% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other.
Bullet Takeaways
- Lamar is the largest billboard owner in North America, a real-estate trust whose assets are roadside displays rather than buildings, increasingly converting them to higher-yielding digital boards that now drive over 30% of revenue.
- The price carries the richest valuation in the REIT group: at roughly 21 times adjusted funds from operations it embeds about 10.6% annual AFFO growth, the most demanding end of the scale for a real-estate trust.
- Watch digital conversion and the local-advertiser base: digital revenue and the airport and logo segments are growing fastest, but the entire stream rises and falls with advertising demand, which tracks the economy.
Bull Case
The earnings trajectory is what justifies a premium billboard REIT, and Lamar's is pointed firmly up. First-quarter net revenue grew 4.5% to $528.0 million, with broad-based strength: the airport business led at 15.5% acquisition-adjusted growth, logos rose 6.3%, and digital revenue grew 5% on a same-board basis. Management reaffirmed full-year adjusted funds from operations guidance of $8.50 to $8.70 per share and pointed to forward booking momentum that could push results past the top of that range. A REIT growing AFFO at a high single-digit-to-double-digit pace is rare, and that growth is the engine behind the rich multiple.
The digital conversion is the structural growth lever and the core of the moat. Lamar operates the largest network of digital billboards in the United States, and digital now accounts for just under 31% of billboard billings and over 30% of total revenue. Converting a static billboard to digital multiplies its revenue because one structure can rotate through many advertisers, and the 10-K describes growth capex going toward "the construction of new and existing billboard displays" and "technology-related investments." The supply of new billboard locations is constrained by zoning and permitting, which means Lamar's existing inventory is a scarce, hard-to-replicate asset, and digitizing it raises the yield on real estate competitors cannot easily add to.
The local-advertiser base and the dividend round out the case. Lamar's revenue is diversified across tens of thousands of local advertisers rather than concentrated in a few national accounts, which makes the stream more resilient than national-ad-dependent media. The company paid a $1.60 per-share quarterly dividend with the same recommended for the next quarter, an annualized distribution near $6.40, and fixed-charge coverage of 6.6 times shows the cash comfortably covers it. Against out-of-home peer Outfront Media, Lamar is the largest and most digitally advanced operator, and the bull case is that a scarce, digitizing real-estate asset growing AFFO at a double-digit clip earns the premium the market assigns it.
Bear Case
The external variable with the most leverage on Lamar is advertising demand, and the price leaves no room for it to disappoint. Out-of-home advertising is discretionary spending that rises and falls with the economy, so a recession that pulls back marketing budgets flows straight to Lamar's revenue. The valuation makes this acute: the price sits at the very top of the REIT group on price-to-adjusted-funds-from-operations, embedding roughly 10.6% annual AFFO growth, which is the most demanding end of the scale, and only about 54% of REITs growing at that pace have sustained it for five years. Paying the richest multiple in the sector for a cyclically sensitive ad business means a single soft year of advertising demand repriced against that multiple has a long way to fall.
The regulatory pressure is the structural risk specific to billboards. The 10-K warns that state governments, "using federal funding for transportation enhancement programs," have "purchased and removed billboards for beautification, and may do so again in the future," and that under eminent domain the displays can be taken. Billboard inventory is not just scarce because it is hard to add; it is also exposed to being legislated away, and a tightening of outdoor-advertising rules in key markets would erode the very asset base the bull case calls a moat. The digital conversion that drives growth is itself often subject to local ordinances on brightness and rotation, so the growth lever is regulated at the municipal level.
Leverage is the third pressure, and it compounds a downturn. Net debt sits near $3.46 billion, about 3.8 times funds from operations, and the 10-K's own debt language warns that the borrowing could "place the Company at a competitive disadvantage relative to those of its competitors that have less debt" and constrain its ability to fund dividends and capital expenditure. A REIT refinances continuously, and higher rates on rolled debt subtract from the AFFO that funds both the dividend and the digital-conversion capex. Fixed-charge coverage near 6.6 times is comfortable today, but it is computed at a cyclical high for advertising; a demand downturn that shrinks AFFO while refinancing costs stay elevated would squeeze coverage, the growth capex, and the premium multiple at once. The bear case is not that Lamar is a weak business; it is that the market is paying the top REIT multiple for a cyclical, regulated, leveraged ad business, and the price already assumes the double-digit growth continues with no cushion if it does not.
Valuation
A billboard trust is valued on its adjusted funds from operations, the cash its displays generate after the maintenance spending to keep them running, and on that basis Lamar is the most expensive name in the REIT group. The price sits at roughly 21 times AFFO, an AFFO yield near 4.8%, and inverts to an assumption of about 10.6% annual AFFO growth sustained for five years. That is the most demanding end of the scale, and the framework flags it as extreme: the price requires growth that only about half of REITs growing at that pace have historically sustained. This is a premium-growth REIT priced for premium growth to continue.
The method families read the way they do for a growth-priced real-estate name. The relative-multiple and growth-oriented lenses support the price, while the asset-value and earnings-power lenses read it as expensive, with the earnings-power lens sitting well below the price. That pattern, only the forward-looking methods reaching the price, tells you this is not a value or asset-supported REIT; it is a durability-and-growth bet. The static methods cannot frame the scarcity of the billboard inventory or the revenue uplift from digital conversion, so they read low, while the price pays for that growth continuing. The premium is real and it is the highest in the sector, so the burden is on the growth to keep arriving.
Leverage for a REIT is read against funds from operations, and here it is moderate: net debt near $3.46 billion is about 3.8 times FFO, with fixed-charge coverage of 6.6 times comfortably covering the dividend and the interest load. The valuation rests on the AFFO growth holding and the digital conversion continuing to lift yields on the existing display base, plus the dividend near $6.40 annualized paying the holder while it does. Against out-of-home peer Outfront Media, Lamar trades at the richest multiple, justified by its scale and digital lead, and the analyst mean target near $155 sits roughly at today's price, with a range from about $145 to $170. The targets clustering near the price say the street sees the growth as largely already paid for, which is the same read this framework reaches: the premium is earned only if the double-digit AFFO growth persists, and the price has little room for it to fade.
Catalysts
The first-quarter 2026 print, reported in early May, supported the premium-growth story. Net revenue grew 4.5% to $528.0 million, with the airport business up 15.5% acquisition-adjusted, logos up 6.3%, and digital revenue up 5% same-board, now over 30% of total revenue. Management reaffirmed full-year AFFO guidance of $8.50 to $8.70 per share and flagged forward booking momentum and margin progress that could carry results past the top of that range, the kind of signal that sustains a high multiple.
The digital conversion and the dividend are the recurring catalysts. Lamar continues to convert static billboards to digital, expanding the largest digital out-of-home network in the United States, which lifts the revenue yield on its existing display base. The company paid a $1.60 per-share quarterly dividend and recommended the same for the next quarter, an annualized distribution near $6.40, which pays the holder while the growth compounds. Programmatic advertising expansion is an additional lever management highlighted.
The sell side is constructive but the targets cluster near the price. The consensus rating spans Buy to Hold, with a mean price target near $155, roughly at today's level, and a range from about $145 to $170, including a TD Cowen target of $170 and a Morgan Stanley raise to $160 at Equal Weight. With targets sitting near the price and the multiple already the richest in the REIT group, the catalysts that matter are the quarterly AFFO trajectory and the pace of digital conversion that justify continuing to pay top-of-sector for the name.
Peer Cohorts (Per Segment, With Filing Citations)
Billboard / Other (logo & transit advertising) (reported)
- OUT (OUTFRONT Media Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Lamar Q1 2026 results, May 2026 · Lamar Q1 2026 dividend, May 2026 · MarketBeat and TipRanks analyst consensus, 2026 · Lamar 2026 guidance, May 2026 · MarketBeat, TipRanks, and analyst notes, 2026