On Thursday, News Corp (NASDAQ:NWSA) received an upgrade from a Macquarie analyst from Neutral to Outperform, with a price target (PT) set at $30.00. The upgrade followed the company's second-quarter fiscal year 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $473 million, which exceeded Macquarie's forecasts by 22% and outperformed consensus estimates from Visible Alpha and FactSet by 19% and 12%, respectively.
The analyst highlighted the robust performance across all of News Corp's businesses. The resilience of advertising exposure and consumer-facing subscriptions was noted as stronger than anticipated. Additionally, the company's disciplined approach to costs contributed to improved operating leverage.
Particularly impressive within News Corp's portfolio was the digital information segment, including Dow Jones, which continued to demonstrate strong performance. The analyst also pointed to potential upside from ongoing artificial intelligence negotiations as a reason for the upgrade.
The price target adjustment to $30.00 reflects the analyst's positive outlook on News Corp's future performance, backed by the recent financial results and strategic developments within the company. News Corp's stock rating improvement to Outperform signals the analyst's confidence in the company's ability to outpace the general expectations of the market.
InvestingPro Insights
News Corp's (NASDAQ:NWSA) recent upgrade by a Macquarie analyst comes amidst a mix of financial metrics and market expectations. According to real-time data from InvestingPro, News Corp has a current market capitalization of $14.98 billion, with a P/E ratio standing at a high 68.89. Despite this high earnings multiple, the company has been maintaining dividend payments for nine consecutive years, which could be a sign of its financial resilience and management's confidence in its cash flow stability.
Additionally, News Corp has demonstrated a solid gross profit margin of 48.73% over the last twelve months as of Q1 2024, which underscores the company's ability to efficiently manage its cost of goods sold and maintain profitability. Meanwhile, the company's stock has been trading near its 52-week high, at 96.65% of the peak price, reflecting investor optimism and aligning with the analyst’s positive sentiment.
Among the InvestingPro Tips, it's noted that News Corp's net income is expected to grow this year, and analysts predict the company will be profitable this year, which may have contributed to the recent upgrade. However, investors should be aware that two analysts have revised their earnings downwards for the upcoming period, indicating potential concerns that could impact future performance. For those looking to delve deeper into News Corp's financial outlook, there are additional InvestingPro Tips available. With a subscription to InvestingPro+, users can access these insights and make more informed investment decisions. Use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription.
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