Based in New York, News Corporation (NWS) is a media and information services company that creates and distributes authoritative and engaging content and other products and services for consumers and businesses. Valued at a market cap of $18.3 billion, the company’s business comprises media, which includes news and information services, sports programming, digital real estate services, book publishing, digital education, and pay-TV distribution.
Shares of this media company have slightly lagged behind the broader market over the past 52 weeks. NWS has gained 17.2% over this time frame, while the broader S&P 500 Index ($SPX) has soared 17.6%. Nonetheless, on a YTD basis, the stock is up 6.2%, outpacing SPX’s 1.7% rise.
Narrowing the focus, NWS has underperformed the Communication Services Select Sector SPDR ETF Fund’s (XLC) 29.5% return over the past 52 weeks and 6.6% gain on a YTD basis.
On Feb. 5, NWS reported its Q2 earnings, posting $2.2 billion in revenues, a 4.7% year-over-year increase, driven by strong growth in Digital Real Estate Services, Book Publishing, and Dow Jones segments. The company also delivered a 22.2% rise in adjusted EPS, reaching $0.33, while total segment EBITDA surged 19.5% to $478 million, highlighting improved profitability.
However, the bottom line fell short of consensus estimates, which led to a slight decline in NWS shares the following day. For the current fiscal year, ending in June, analysts expect NWS’ EPS to grow 47.1% year over year to $1.03.
Wall Street’s consensus view on NWS is “Strong Buy,” which is based on unanimous “Strong Buy” ratings from all three analysts in coverage.
This configuration is slightly more bullish than three months ago, with two analysts suggesting a “Strong Buy” rating.
On Nov. 12, Guggenheim maintained a “Buy” rating on NWS and raised its price target to $40, which indicates a 23.8% potential upside from the current levels.
The mean price target of $38.67 represents a modest 19.6% upside from NWS’ current price levels, while the Street-high price target of $41 suggests an upside potential of 26.8%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
