News Corp is one of the world’s largest media companies. The company’s operations include the production and distribution of motion pictures and television programming. The company also manages direct broadcast satellite operations in the UK, Italy and Asia. News Corp also publishes newspapers in the UK, Australia and the US.
NWSA has benefited from a systematic rehab of its investments, operations and capital allocation practices over the past 18 months. Last year, NWSA sold MySpace and initiated a $5bn share repurchase plan, which was repeated this year. More recently, NWSA consolidated
several investments (Fox Pan American Sports, ESPN Star Sports and CMH) which will make them easier to value. NWSA’s next move, spinning off the Publishing division this spring, will be the next major step in this metamorphosis. While NWSA has already appreciated to the spin news, we wanted to reflect it (and other changes) in our valuation.
Increasing target from $25 to $30. As NWSA prepares to spin out the Publishing division, we are updating our valuation to reflect slightly revised multiples, revised estimates and several investments. The two largest components of our higher valuation are a higher Cable Network segment value (driven by a 1x higher multiple turn) and CMH, which, now that it’s consolidated, should benefit from a higher multiple as well.
Revising lower FY13 est. We are revising lower several of our FY13 revenue and OI est. All told, our revenue est. decline from $35.3bn to $34.7bn and our OI est. decline from $6.19bn to $5.98bn
- News Corp. to Buy 49% of YES Network With Option for 80% Stake – Bloomberg (bloomberg.com)
- News Corp to launch bid to control Yankee channel (thehimalayantimes.com)