OUTFRONT Media Inc. (OUT) stock intrinsic value fair value estimate & owner earnings analysis

OUTFRONT Media is a real estate investment trust that sells advertising on roadside billboards and on transit systems, with New York's Metropolitan Transportation Authority (MTA) as its largest transit contract. In 2025 it earned $1,831.7 million of revenue, all in the United States: $1,391.4 million from billboards, $431.2 million from transit and $9.1 million from other sources. The Canadian business was sold in June 2024, so results before then include a business the company no longer owns. What we measure. We estimate what the business earns for its owners as operating cash flow, less swings in working capital, less stock compensation, less the portion of capital spending needed just to keep the displays running. On that basis owner earnings per share were $0.90 in 2022, $1.10 in 2023, $1.14 in 2024 and $1.42 in 2025. 2020 and 2021 (pandemic years, $0.21 and $0.32) are excluded from the level. We centre on 2023 to 2025 at about $1.14 per share, a period that is close to the current business after the Canadian sale. Owner earnings rose about 24% in 2025, but that came mostly from a $67 million build in customer receivables being stripped out as timing; we assume 1.5% growth in year one, well below that. A cost the reported figures miss. Spending on MTA equipment deployment and franchise rights sits in investing activities, not capital expenditures ($19.6 million and $12.0 million in franchise rights in 2025 and 2024). Management expects about $35 million in 2026 and $30 to $40 million a year through the remainder of the MTA contract. We deduct about $35 million a year, roughly $0.21 per share, in every case, which brings the starting level to about $0.93 per share. The MTA contract has a 13-year base term with an option to extend, and the $431 million of transit revenue depends on it. Base case, about $15.70 per share. Owner earnings start at $0.93 and grow 1.5% a year for ten years, in line with U.S. revenue growth of about 3% a year over 2023 to 2025 but haircut because billboard revenue fell 1.3% in 2025 and transit (up 12%) carried the growth. We then hold earnings flat for a further 30 years, discounted at 6%, on the basis that billboard sites and transit displays already in place keep earning, and end the story after 40 years because nothing in the filings shows what happens beyond. Bear case, about $6.50. A pandemic-style advertising downturn recurs (2020 owner earnings were $0.21 per share), refinancing of $2.58 billion of debt (average cost 5.3%) at higher rates trims cash flow, and earnings start at about $0.59 and decline 1% a year for 25 years before ending. Bull case, about $20.80. Owner earnings start near $1.10, close to the 2025 level less MTA costs, and grow 3% a year for ten years, the pace of U.S. revenue growth in 2024 and 2025 (3.9% and 2.0%) roughly sustained, then hold flat for 30 more years. What we left out. First-half 2026 revenue was $952.1 million against $850.9 million a year earlier and operating cash flow was $183.7 million against $100.7 million, but the filing data we have does not explain the jump, so none of it is credited. Management also assumes MTA revenue growth of 5% to 10% a year; that is a target and is excluded. Small acquisitions of $13 to $34 million a year are not credited as growth. The debt is a real vulnerability and is reflected in the bear case only; we did not subtract it separately. What could make this wrong: a deeper ad downturn than 2020, MTA terms that are less favourable than assumed after the base term, or higher refinancing costs.