NWSA
News Corporation
$28.29
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 39.7% below fair value
You pay
$28.29
Bear
$37.54
Fair
$46.93
Bull
$56.32
Bear
$37.54
+32.7%
$2.31 × 18x P/E
Fair
$46.93
+65.9%
$2.31 × 22x P/E
Bull
$56.32
+99.1%
$2.31 × 27x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
12.2x
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