Does News Corp’s stock have an edge?
After an 11% decline over the past six months, at the current price of around $20 per share, we believe News Corp Stocks (NASDAQ: NWSA), a diversified global media and information services company – could post gains. NWSA stock has fallen from around $23 to $20 in the past six months, significantly underperforming broader indices, with the S&P down around 7% over the same period. The decline in equities during this period can be attributed to fears of a slowing economy, driven by supply chain worries, war in Europe and now another Chinese shutdown. However, recent NWSA performance, while not all good, has been generally positive. Only revenue associated with the Subscription Video Services portion of the business was flat in the first six months of 2021, other than most other parts of the business doing quite well.
In the first six months of fiscal 2022, News Corp’s revenue grew 15% year-over-year to $5.2 billion, largely driven by a 40% increase in the Digital Real unit Estate Services. Additionally, the company’s earnings per share were 73 cents in the first half of 2022, down from 45 cents the same time last year. Additionally, News Corp amassed nearly $1 billion in total segment EBITDA, an increase of 30%, in the first half of this fiscal year.
We plan News Corp Revenue to $10.4 billion in fiscal 2022, up 11% year-over-year. On the bottom line, we now expect the earnings per share estimate to be $12.99. Given changes to our revenue and RPS forecasts, we have revised News Corp Rating at $29 per share, based on an expected RPS of $12.99 and a P/S multiple of 2.3x for fiscal year 2022, nearly 42% above the current market price . That said, the company’s shares look very cheap at the current price. NWSA’s P/S multiple dropped from 1.01x in FY18 to 2.20x
News Corp also continues to focus on other ways to grow. The company announced in December 2021 that it had acquired Base Chemicals, a provider of chemical market data and analytics. That acquisition cost the company $295 million, and it followed its larger $1.15 billion acquisition of the oil price information service in July of that year.
Here you will find our previous coverage of the NWSA stock where you can follow our view over time.As NWSA shares look set for more gains going forward, it’s worth seeing how its peers stack up. Find out how News Corp peers price on the measures that matter. You can find other useful comparisons for companies in all industries on Peer Comparisons.
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