What’s Next for NY Times’ Stock?

-5.20%
Downside
43.79
Market
41.51
Trefis
NYT: New York Times logo
NYT
New York Times

After more than a 20% increase year-to-date (YTD), at the current price of around $40 per share, we believe New York Times’ stock (NYSE: NYT), a diversified media company that includes newspapers, internet businesses, television, and radio stations, looks appropriately priced. NYT stock has increased from around $33 to $40 YTD, largely outperforming the broader indices, with the S&P declining about 9% over the same period. The company again beat profit expectations on continuing growth in its online subscriber base in its fourth quarter results – which led to this rise in share price. NY Times changed its fiscal year to line up with the calendar year, giving it an extra six days in the fourth quarter. For the upcoming Q1 2023, NYT sees digital-only subscription revenue rising to about 13% to 16% year-over-year (y-o-y), and total subscription revenue up 6% to 9%. The digital ad revenues and the larger total ad revenues are expected to decline by low single-digits. We believe that NYT stock may remain under pressure for the foreseeable future as it continues to wrestle with the industry-wide slowdown in digital advertising. But the growth in its subscriber base is a big positive for the longer term.

In Q4, NYT’s revenue grew 12% y-o-y to $667.5 million. This figure came as subscriptions continued to make up for advertising in the revenue stream. To break down the revenue gains further, advertising revenue increased fractionally y-o-y to $179.2 million, but subscription revenues rose 18% y-o-y to $414.1 million. Other revenue landed at $74.3 million. The company changed its fiscal year to line up with the calendar year, as a result, Q4 2022 had an extra six days compared with the fourth quarter of 2021. In 2022, NYT’s 9.55 million subscribers purchased approximately 10.98 million paid subscriptions to its digital and print products – of which paid digital-only subscribers totaled 8.83 million. The company continues to be on track for its new target of at least 15 million total subscribers by the end of 2027.

We forecast NYT’s Revenues to be $2.4 billion for the fiscal year 2023, up 5% y-o-y. Looking at the bottom line, we now forecast adjusted earnings per share (EPS) to come in at $1.26. Given the changes to our revenues and EPS forecast, we have revised NYT’s Valuation to $39 per share, based on a $1.26 expected EPS and a 31.0x P/E multiple for the fiscal year 2023 – 3% lower than the current market price. That said, the company’s stock appears appropriately priced at the current price.

It is helpful to see how its peers stack up. NYT Peers shows how NYT’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 Apr 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 NYT Return 4% 24% 203%
 S&P 500 Return 1% 8% 85%
 Trefis Multi-Strategy Portfolio 2% 10% 246%

[1] Month-to-date and year-to-date as of 4/17/2023
[2] Cumulative total returns since the end of 2016

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