New York Times (NYT – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Thomas Yeh from Morgan Stanley maintained a Hold rating on the stock and has a $54.00 price target.
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Thomas Yeh gave his rating based on several factors influencing the New York Times’ stock performance. One of the primary reasons for the Hold rating is the concern over slowing growth in core news subscriptions, which poses a risk to the company’s premium valuation multiple. Despite this challenge, the New York Times demonstrates pricing power and operating leverage that provide some level of support to its valuation. The company’s digital subscription revenue exceeded expectations in the fourth quarter, driven by growth in average revenue per user (ARPU) among both Bundle and news-only subscribers.
Additionally, while there is a risk of further deceleration in news subscription net additions, the New York Times’ scale and pricing strategy contribute to a healthy projected EBITDA growth through 2027. This balance of risks and strengths results in a Hold rating, as the current valuation appears reasonable given the company’s growth outlook. The analyst suggests that a more favorable rating could be considered if there is a significant increase in digital news net additions, indicating a larger total addressable market for subscribers.
According to TipRanks, Yeh is an analyst with an average return of -3.2% and a 40.00% success rate.
In another report released yesterday, Cannonball Research also maintained a Hold rating on the stock with a $55.00 price target.