VALUATION HIGHLIGHTS

1. Book Publishing constitutes 32% of the Trefis price estimate for News Corp's stock.
2. Dow Jones constitute 26% of the Trefis price estimate for News Corp's stock.
3. News Media constitutes 21% of the Trefis price estimate for News Corp's stock.

WHAT HAS CHANGED?

1. News Corp Q2 2026 Snapshot

News Corporation reported fiscal Q2 2026 results with revenue of approximately $2.36 billion, up about 3% year-over0year, modestly ahead of consensus estimates. Diluted EPS came in at $0.34, exceeding expectations of roughly $0.31 to $0.32 per share. Net income was approximately $193 million, while operating income increased to around $403 million, reflecting margin expansion supported by strength at Dow Jones and improved contribution from Digital Real Estate Services. While advertising trends remained uneven, particularly in print, segment mix and cost discipline drove earnings outperformance.

Note: News Corp's FY'25 ended on June 30, 2025. Q2'26 refers to quarter that ended on December 31, 2025

2. Outlook

For fiscal 2026, management has not issued a formal full-year quantitative guidance range (e.g., specific revenue or EPS targets) in the public press releases to date. However, commentary accompanying the quarterly results indicates confidence in continued growth in core digital and subscription-driven segments, particularly Dow Jones professional information services and Digital Real Estate Services, which are expected to remain primary growth drivers through the year. Management also highlighted strong free cash flow generation and an accelerated share buyback program, signaling confidence in ongoing financial performance and capital allocation. These strategic priorities suggest that News Corp anticipates a stable execution environment in FY2026, albeit with recognition of macro and segment headwinds such as continued pressure in certain advertising lines.

3. Sale of Foxtel

News Corp sold its Australian cable TV unit Foxtel to British-owned sports network DAZN for 3.4 billion Australian dollars ($2.1 billion), including debt, cutting the media empire’s exposure to a business upended by streaming platforms. Foxtel, launched by News Corp in 1995, has dragged profits due to declining subscribers switching to cheaper streaming services like Netflix. Despite efforts to diversify with streaming services like Kayo and ESPN, soaring sports broadcasting rights costs and shrinking revenue hurt earnings, leading Foxtel to share rights with free-to-air broadcasters to offset expenses.

DAZN is a London-headquartered global streaming platform available in North America, Europe, and Asia. DAZN competes against traditional TV and satellite channels and provides access to a range of sports content, including American football, boxing, and baseball, over its streaming platform.

Upon reclassification of Foxtel’s results, the Subscription Video Services segment ceased to be a reportable segment, and the residual results of the segment were aggregated into the News Media segment.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below we highlight key drivers of News Corp's value that present opportunities for upside or downside to the current Trefis price estimate for News Corp.

Digital Real Estate

• Digital Real Estate Revenues: News Corp through REA offers digital advertising solutions to help real estate agents sell or rent properties and win new listings. The company generates revenues from advertising. REA owns and operates Australia's largest residential property website, realestate.com.au, and Australia's largest commercial property site, realcommercial.com.au. Moreover, the company acquired Move Inc. in the U.S. which will further drive the company's revenues. We estimate that segment revenues will grow from $1.8 billion in FY2025 to approximately $3 billion by the end of our forecast period. However, driven by a surge in housing demand in Australia and benefits from the Move group of websites, digital real estate could grow at a higher rate. There could be an upside of more than 7% to the Trefis price estimate for News Corp's stock if the segment revenues were to increase to $3.5 billion by the end of our forecast period. On the other hand, if the real estate ad marketplace tends to be softer, it could lead to slower-than-expected advertising growth for News Corp. If the revenues only grow to around $2.0 billion during the Trefis forecast period, there could be an 8% downside to our price estimate.

BUSINESS SUMMARY

News Corp is a diversified media and information services company. The Company operates in four segments: Dow Jones, Digital Real Estate Services, News Media, and Book Publishing. The company distributes its content under various popular brands, including The Wall Street Journal, Barron's Group, Herald Sun, and HarperCollins Publishers.

The Wall Street Journal, published by News Corp, is the leading circulation daily newspaper in the U.S., with an average print and digital circulation of approximately 4.5 million.

SOURCES OF VALUE

News Corp’s value is anchored in its high-margin digital and subscription businesses, notably Dow Jones (Wall Street Journal, Barron’s, B2B information services) and its stakes in online real estate platforms like REA Group and Realtor.com, which provide scalable, recurring revenue. Supporting this are HarperCollins, a stable cash-generating book publisher, and News Media, where print headwinds persist but digital subscriptions and advertising still contribute cash flow.

KEY TRENDS

Growth In Digital Content

Online media provides more abundant information, at a faster rate and cheaper prices when compared to print media. This has effectively rendered print newspapers obsolete, and as online reading is further made easier by tablets/smartphones, both physical circulation and print advertising within newspapers would likely see a decline going forward.

Migration To Other Media Alternatives

News Corp's businesses face competition from other sources of news, information, and entertainment content delivery, and consumers are migrating to other media alternatives. This reflects general trends in the newspaper industry, including declining newspaper buying by younger audiences and consumers' increasing reliance on the internet for the delivery of news and information, often without charge.

Social Media To Drive Future Growth

Social media is not the core revenue engine itself, but it can serve as a high-ROI marketing pipeline, boosting subscriptions, advertising, and engagement across News Corp’s digital assets. Platforms like X (Twitter), LinkedIn, Instagram, and TikTok are where readers increasingly discover news. By leveraging curated snippets, short-form video, and headline-driven content, News Corp can funnel users into paid subscriptions for Dow Jones, The Wall Street Journal, Barron’s, and other titles. News Corp can also monetize engagement through branded content, affiliate deals, and performance-based campaigns distributed via social channels, diversifying beyond print and traditional display ads.