Up 28% This Year, How Will NY Times’ Stock Trend Following Q3 Results?

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New York Times

New York Times’ stock (NYSE: NYT), a diversified media company that includes newspapers, internet businesses, television, and radio stations, is scheduled to report its Q3 2023 results on Wednesday, November 8. We expect NYT stock to likely see little to no movement with both revenues and earnings matching consensus expectations for its third-quarter results. The company continues to wrestle with the industry-wide slowdown in digital advertising and a decline in print revenues, due to a tough macro climate. For Q3, NYT sees digital-only subscription revenue rising to about 14% to 17% year-over-year (y-o-y), and total subscription revenue up 8% to 10%. The digital ad revenues are expected to increase mid-single-digit in Q3 and the larger total ad revenues are expected to remain flat during this period. Other revenues are expected to increase by 13% to 16% y-o-y in Q3 2023.

NYT stock has seen a decline of 20% from levels of $50 in early January 2021 to current levels, vs. an increase of about 15% for the S&P 500 over this roughly 3-year period. However, the decrease in NYT stock has been far from consistent. Returns for the stock were -7% in 2021, -33% in 2022, and 29% in 2023 (YTD). In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 14% in 2023 (YTD) – indicating that NYT underperformed the S&P in 2021 and 2022. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Consumer Discretionary sector including AMZN, TSLA, and TM, and even for the megacap stars GOOG, MSFT, and AAPL. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could NYT face a similar situation as it did in 2021 and 2022 and underperform the S&P over the next 12 months – or will it see a recovery?

Our forecast indicates that NY Times’ valuation is $42 per share, matching the current market price. Look at our interactive dashboard analysis on New York Times Earnings Preview: What To Expect in Fiscal Q3? for more details.

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(1) Revenues expected to be in line with the consensus estimates

Trefis estimates NY Times’ Q3 2023 revenues to be around $580 Mil, in line with the consensus estimate. In Q2, NYT’s revenue grew 6% year-over-year (y-o-y) to $590.9 million as the company wrestled with the industry-wide slowdown in digital advertising. That figure came as subscriptions continued to make up for advertising in the revenue stream. To break down the revenue gains further, advertising revenue remained flat y-o-y to $117.8M, but subscription revenues rose 17% to $409.6 Mil. Other revenue landed at $63.5 Mil, up 16% y-o-y. The media company reported approximately 9.88 million subscribers across its print and digital products, including approximately 9.19 million digital-only subscribers. The company continues to be on track for its target of at least 15 million total subscribers by the end of 2027.  For the full-year 2023, we expect NYT’s Revenues to grow 5% y-o-y to $2.4 billion.

2) EPS to likely match consensus estimates 

NYT’s Q3 2023 earnings per share (EPS) is expected to come in at 29 cents per Trefis analysis, in line with the consensus estimate. NYT earnings came in at 28 cents per share, down 24% y-o-y in Q2 2023.

(3) Stock price estimate in line with the current market price

Going by our NYT’s Valuation, with an EPS estimate of around $1.47 and a P/E multiple of 28.3x in fiscal 2023, this translates into a price of almost $42, which nearly  matches the current market 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.

Returns Nov 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 NYT Return 3% 28% 212%
 S&P 500 Return 5% 15% 97%
 Trefis Reinforced Value Portfolio 4% 22% 525%

[1] Month-to-date and year-to-date as of 11/6/2023
[2] Cumulative total returns since the end of 2016

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