News Corp’s Q2 report was better-than-expected, on underlying assessment, with growth at REA Group ((REA)) expected to slow, but Citi analysts consider this a temporary revenue dip only. The Q2 result was heavily dominated by full consolidation of Foxtel, point out the analysts.
Despite the company making real progress in digital subscriptions, Citi analysts highlight News and Info Services continues its trend of negative earnings leverage, with revenue declines continuing to outpace falling costs. Buy.
Target price is $20.00.Current Price is $18.00. Difference: $2.00 – (brackets indicate current price is over target). If NWS meets the Citi target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).