Analysts Raise Price Targets on News Corp. Stock After Earnings Report

4:22 AM PDT 8/9/2012 by Georg Szalai

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UPDATED: The stock of Rupert Murdoch's conglomerate, which has been flying high since the announcement of a company split, briefly hits a five-year high.

Rupert Murdoch's News Corp. late Wednesday reported a loss due to a big publishing unit charge, but analysts on Thursday focused on the positives from the entertainment conglomerate's earnings conference call.

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•Rupert Murdoch

Several Wall Street observers early Thursday raised their price targets on News Corp.'s stock, citing the company's outlook for its new fiscal year, which met expectations, and positive initiatives.

The stock of Rupert the conglomerate, which has been flying high since the announcement of a company split, briefly hit a five-year high of $24.05, but later in the trading session settled down again.

"The theme of the News Corp. conference call centered around fiscal year 2013 guidance where News Corp. guided in-line with Street estimates," said Barclays Capital analyst Anthony DiClemente. "Other than guidance, the call focused on management's ongoing commitment to the buyback and the accretive consolidation of certain entities like Fox Pan Am Sports."

Importantly, "like much of U.S. media, we expect News Corp. to benefit from upfront repricing, affiliate fee renewals, the political advertising cycle, capital returns and reasonable valuation," DiClemente said. "As such, we are raising our price target to $27 from $25."

Susquehanna Financial Group analyst Vasily Karasyov even boosted his price target by $5 to $28. In a report entitled "Yes, This Should Work," he wrote: "We acknowledge that the company’s commentary on the slower pace of stock repurchase in fiscal year 2013 is likely to be viewed as an incremental negative, but believe that the positives of the story, including what we see as relatively conservative guidance, will outweigh it in the longer run."

Lazard Capital Markets analyst Barton Crockett said about the News Corp. earnings report. "We're retaining our ‘buy,’ seeing potential for an additional 10 percent upside based on our price target."

And Evercore Partners analyst Alan Gould wrote: "We reiterate our "overweight" rating and $26 price target based on the superior fundamental earnings growth and the recent shareholder-friendly moves."

Email: Georg.Szalai@thr.com
Twitter: @georgszalai