On Friday, Citi analysts began coverage of News Corp (NASDAQ:NWSA) stock, issuing a Buy rating and establishing a price target of $36.00. The new rating anticipates significant strategic moves by the company's management over a two-year period, which Citi believes could substantially increase shareholder value. According to InvestingPro data, analyst consensus remains strongly bullish with a 1.75 rating, while price targets range from $24.14 to $41.00.
The analysts project that News Corp will expand its ownership stake in REA Group Limited from the current 61% to 80% and subsequently spin-off REA to News Corp’s shareholders. These actions are expected to potentially unlock $22 of value per share, half of which is already incorporated into the $36 price target set by Citi.
News Corp, a global, diversified media and information services company with a market capitalization of $16.15 billion, has not yet made a public response to the initiation of coverage or the analysts' projections.
The company's portfolio includes businesses in news and information services, book publishing, digital real estate services, and subscription video services among others. InvestingPro data shows the company maintains healthy financials with a "GOOD" overall health score and solid revenue of $10.16 billion in the last twelve months.
The market's reaction to the initiation of coverage and the Buy rating by Citi analysts will be closely watched by investors. The strategic moves outlined by Citi are anticipated to have a notable impact on the company's financial position and its appeal to investors seeking growth opportunities.
The coverage initiation by Citi comes as investors are continually looking for guidance on potential value-creating opportunities within the media and digital services sectors. News Corp's stock performance following this development will be an indicator of investor sentiment towards the company's growth prospects and strategic direction.
In other recent news, News Corporation has been actively implementing its ongoing stock repurchase program, buying back up to $1 billion worth of its Class A and Class B common stock. This initiative is a part of the company's strategy to manage capital effectively and deliver value to shareholders, as disclosed in a series of filings with the Securities and Exchange Commission.
The company's recent financial performance indicates a 3% year-over-year increase in revenue to $2.58 billion and a 14% enhancement in profitability to $415 million. However, News Media revenues experienced a slight decline of 5% to $521 million.
In a significant recent development, News Corp sold its Australian media business, Foxtel, to sports streaming company DAZN in a $2.1 billion equity exchange deal. Loop Capital, despite lowering its price target for News Corp to $41 from $44, upheld a Buy rating for the company's stock. Analysts from InvestingPro maintain a positive outlook on News Corporation's financial health, endorsing the continuation of the stock buyback strategy.
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