News Corp's Price Target Trimmed: Loop Capital Adjusts to $41

Loop Capital has adjusted its price target for News Corp (NWSA) to $41 from $44, reflecting a mark-to-market adjustment on REA Group valuation following the company's sale of Foxtel to DAZN for $2.1 billion. The sale simplifies News Corp's business and creates a more liquid asset, but the reduced price target indicates that this transaction may not fully offset the decline in REA Group's value.

News Corp's strategic move to sell Foxtel to DAZN is expected to improve its credit profile, as the shareholder loans owed to the company will be repaid in full. However, the reduced price target reflects a more conservative outlook on the company's future earnings potential. Loop Capital analyst Alan Gould cited the sale of Foxtel as a factor in the reduced target, as it simplifies News Corp's business and creates a more liquid asset. Despite the price target reduction, the company's strong financial performance and strategic initiatives suggest potential upside for investors.

Loop Capital's price target adjustment for News Corp (NWSA) from $44 to $41 reflects a 6.8% decrease, indicating a potential re-evaluation of the company's growth prospects. To assess the impact on News Corp's valuation multiples, we compare its P/E ratio and EV/EBITDA with its peers in the media and entertainment industry.

As of Dec 24, 2024, News Corp's P/E ratio stands at 45.24, while its EV/EBITDA is 12.73. Among its peers, Disney (DIS) has a P/E of 16.53 and an EV/EBITDA of 14.25, while Netflix (NFLX) has a P/E of 22.35 and an EV/EBITDA of 18.47. The lower P/E and EV/EBITDA multiples for News Corp suggest that the market perceives it as relatively overvalued compared to its peers.

Loop Capital's price target reduction may indicate a shift in investor sentiment, potentially leading to a re-evaluation of News Corp's valuation multiples. However, it is essential to consider other factors, such as the company's fundamentals and growth prospects, when assessing its valuation.



In conclusion, Loop Capital's price target adjustment for News Corp reflects a more conservative outlook on the company's future earnings potential following the sale of Foxtel to DAZN. While the transaction simplifies News Corp's business and creates a more liquid asset, the reduced price target indicates that this transaction may not fully offset the decline in REA Group's value. Investors should consider the company's strong financial performance and strategic initiatives when evaluating its growth prospects and valuation multiples.