News Corp (NWS) Update

Submitted by Share Trading on 22 April, 2008 - 12:01

News Corp (NWS) has a $33.03 share price target and an Outperform recommendation from Australian stock analyst Macquarie Research Equities.

NWS: Newscorp Sees Support at $20

News Corp (NWS) - Outperform
Current Price: $20.00
Target Price: $33.03 (~65% Upside)
P/E: 16.0 X
Div Yield: 0.5% (0% Franked)

News Corp (NWS) Technicals:

NWS has been suffering since the start of 2007 thanks to the uncertainty surrounding the Liberty Stake, and more recently the effect of a strong AUD. NWS has been languishing around levels seen 3 years ago, despite some positive news flow of late. NWS has historically been well supported around the $20 mark as both the IRESS Weekly and Monthly Charts below show.

News Corp Weekly
Source: IRESS Weekly
Past performance is not a reliable indicator of future performance.

News Corp Monthly
Source: IRESS Monthly
Past performance is not a reliable indicator of future performance.

News Corp (NWS) Fundamental Analysis

Macquarie Research Equities (MRE) Fundamental View of News Corp:
1. The resolution of the Liberty stake strengthens Rupert Murdoch’s control over NWS and represents the largest stock buyback ever undertaken by the company, valued at US$10.1bn. It represents a 16.3% reduction in NWS total capital base.
2. Reduced share base is 7% EPS accretive in FY09.
3. MRE believes that NWS has enough drivers in place in the form of Cable, Sky Italia and Fox Interactive Media (FIM) to more than offset any sub-prime related advertising slow-down.
4. MRE forecasts a declining AUD from USD$0.93 currently to USD$0.87 by the end of the year. This should go a good way towards removing the currency overhang that has plagued this stock of recent times.