NWSA
News Corporation
$25.89
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 44.8% below fair value
You pay
$25.89
Bear
$37.54
Fair
$46.93
Bull
$56.32
Bear
$37.54
+45.0%
$2.31 × 18x P/E
Fair
$46.93
+81.3%
$2.31 × 22x P/E
Bull
$56.32
+117.5%
$2.31 × 27x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
11.2x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $31.70 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $46.93 per share.
Warnings
Wall Street's average price target is $31.70 (from 28 analysts). Our estimate is 64% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples