Cautious Hold Rating on New York Times Amid AI Licensing Opportunities and Legal Challenges

Morgan Stanley analyst Thomas Yeh maintained a Hold rating on New York Times (NYT – Research Report) yesterday and set a price target of $54.00.

Thomas Yeh’s rating is based on New York Times’ recent strategic move to license its content for AI training, marking a significant step in leveraging its intellectual property for additional revenue streams. The agreement with Amazon is expected to generate substantial incremental licensing revenues, estimated between $30 to $50 million annually, which could enhance the company’s EBITDA forecast by 5-10% by 2026. However, the financial terms of the deal remain undisclosed, and the potential impact on the company’s core subscription model is a critical consideration.
While the licensing agreement presents a promising opportunity for high-margin revenue, it also poses a risk of diluting the value of New York Times’ core subscription offerings. The ongoing litigation with OpenAI and Microsoft over alleged copyright infringement further complicates the scenario, as it highlights the challenges in balancing new revenue opportunities with the protection of core business interests. These factors combined have led Thomas Yeh to adopt a cautious stance, resulting in a Hold rating for the stock.

According to TipRanks, Yeh is ranked #6788 out of 9552 analysts.