What's Next For News Corp's Stock?

Core Viewpoint - News Corp's stock has seen a 14% increase since the beginning of 2024, but it has underperformed compared to broader indices like the S&P 500, which rose about 27% during the same period [1] Financial Performance - In Q1 2025, News Corp's total revenues increased by 3% year-over-year to $2.6 billion, driven by higher revenues in Australian residential at REA Group, digital book sales, and growth in the Dow Jones segment [2] - Net income per share rose to $0.21 from $0.05 in the prior year, with adjusted EPS up 31% year-over-year to $0.21 [2] - The company forecasts revenues of $10.4 billion for fiscal year 2025, representing a 4% year-over-year increase, with an expected EPS of $0.90 [7] Segment Analysis - The Subscription Video Services segment showed a revenue increase of 3% but a decline in EBITDA by 1%, attributed to higher costs related to Hubbl's launch and increased sports programming rights expenses [3] - The News Media segment experienced a revenue decline of 5%, although EBITDA increased by 14%, indicating ongoing challenges in print and a transition to digital platforms [3] Strategic Moves - News Corp has agreed to sell its Australian cable TV unit Foxtel to DAZN for AUD 3.4 billion (USD 2.1 billion), marking a strategic exit from a struggling business amid competition from streaming platforms [5] - The company plans to focus on growth in key divisions, with Dow Jones expected to drive B2B growth and Digital Real Estate seeing a 14% rise in Australian residential listings [6] Valuation Insights - The revised valuation for News Corp is set at $31 per share, based on a projected EPS of $0.90 and a P/E multiple of 34.5x, indicating that the stock appears undervalued at its current price [8]