Andrew McLeod, an analyst from Morgan Stanley, maintained the Buy rating on News Corp (NWSA – Research Report). The associated price target is $37.00.
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Andrew McLeod has given his Buy rating due to a combination of factors that highlight the potential of News Corp’s Dow Jones segment. The recent sale of Foxtel has allowed Dow Jones to increase its contribution to the group’s EBITDA, which is expected to rise to about 40% by FY26E. McLeod believes that the market is undervaluing Dow Jones, particularly given its strong digital business model, high margins, and promising growth prospects.
McLeod emphasizes the structural growth drivers and the robust performance of the Enterprise segment within Dow Jones, which is projected to see revenue growth of 10-20% over the next five years. This growth is supported by new product launches, price increases, and strategic acquisitions. Furthermore, as the Enterprise segment’s contribution to earnings increases, McLeod anticipates a gradual re-rating of Dow Jones’ valuation multiples, reinforcing his confidence in the stock’s potential for future earnings growth.
According to TipRanks, McLeod is a 3-star analyst with an average return of 0.9% and a 50.00% success rate. McLeod covers the Communication Services sector, focusing on stocks such as News Corp, REA Group Ltd, and Seek Limited.
In another report released on April 8, Citi also reiterated a Buy rating on the stock with a $36.00 price target.