[Note: News Corp Fiscal Year Ends in June]
After a 17% decline over the last twelve months, at the current price of around $18 per share, we believe News Corp stock (NASDAQ
NDAQ
: NWSA), a global, diversified media and information services company, is fairly priced. NWSA stock fell from around $21 to $18 over the last twelve months, underperforming the broader indices, with the S&P also falling about 6% over the same period. The stock declines during this period can be attributed to fears of a slowing economy driven by inflation. The company also missed estimates on both the top and bottom lines in the fiscal first half of 2023 (ended December 31). News Corp’s revenues declined 4% year-over-year (y-o-y) to $5 billion while its profitability declined 75% y-o-y to 18 cents in the first six months of FY 2023. The results were driven by lower advertising, consumer, and real estate revenues over this period. Also, the company witnessed the negative impact of foreign currency fluctuations. Segment-wise, NWSA’s Book Publishing saw the largest dip and was down 12% y-o-y in the fiscal first half, primarily due to lower print and digital book sales in the U.S. market due to slowing consumer demand industry-wide, difficult frontlist comparisons, and the impact of Amazon’s
AMZN
reset of its inventory levels and rightsizing of its warehouse footprint.
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