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. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 14% in 2023 – 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 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?
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