Will News Corp Stock See Higher Levels Following Q4 Results?

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Trefis
NWSA: News logo
NWSA
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[Note: News Corp Fiscal Year Ends in June]

News Corp stock (NASDAQ: NWSA), a global, diversified media and information services company, is scheduled to report its fiscal fourth-quarter results on Monday, August 8. We expect NWSA’s stock to trade higher due to revenues and earnings beating expectations in its fourth-quarter results. NWSA’s recent performance, while not all strong, has been generally positive. Only revenue associated with the Subscription Video Services portion of the business came in flat during the first three quarters of 2022, other than that most other parts of the business fared quite well. We expect this momentum to continue in fiscal Q4 as well.

Our forecast indicates that NWSA’s valuation is $20 per share, which is 15% higher than the current market price. Look at our interactive dashboard analysis on NWSA Earnings Preview: What To Expect in Q4? for more details.

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(1) Revenues to be slightly ahead of consensus estimates

Trefis estimates NWSA’s Q4 2022 revenues to be around $2.7 Bil, slightly ahead of the consensus estimate of nearly $2.6 Bil. In the first nine months of fiscal 2022, News Corp’s revenue grew 12% year-over-year to $7.7 billion, largely due to a 32% rise in the Digital Real Estate Services unit.

News Corp continues to focus on other ways to grow. Dow Jones, which owns the WSJ, has launched a site called Buy Side. Like NYT’s Wirecutter, it offers independent product recommendations in exchange for affiliate commissions from links to the site. Also, Move, the operator of Realtor.com, acquired UpNest which operates a marketplace that connects home sellers with highly qualified local agents. These developments followed the acquisition of Base Chemicals (in Dec 2021), a provider of market data and analytics on chemicals which cost the company $295 million. In addition, NWSA also saw a larger $1.15 billion acquisition of the Oil Price Information Service in July 2021.

(2) EPS is expected to be well ahead of consensus estimates

NWSA’s Q4 2022 earnings per share (EPS) is expected to be 8 cents per Trefis analysis, ahead of the consensus estimate of 7 cents. The company’s earnings per share came in at 87 cents in the first three quarters of 2022 compared to 58 cents in last year’s same period. Also, News Corp amassed nearly $1.4 billion of total segment EBITDA, a 27% surge, in the first nine months of this fiscal year.

(3) Stock price estimate higher than the current market price

Going by our NWSA’s Valuation, with a earnings per share estimate of around 95 cents and a P/E multiple of around 21.3x in fiscal 2022, this translates into a price of almost $20, which is 15% ahead of the current market price.

It is helpful to see how its peers stack up. NWSA Peers shows how News Corp’s stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Aug 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 NWSA Return 1% -22% 52%
 S&P 500 Return 1% -13% 85%
 Trefis Multi-Strategy Portfolio 3% -11% 252%

[1] Month-to-date and year-to-date as of 8/5/2022
[2] Cumulative total returns since the end of 2016

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