Last Update 07 Mar 26

NWSA: AI Licensing Deal And Buybacks Will Support Future Upside

Narrative update on analyst price target

The analyst price target for News Corp has been trimmed by $1, reflecting slightly higher assumed discount rates and a marginally higher future P/E multiple as analysts reassess the stock after recent price target cuts from major firms.

Analyst Commentary

Recent research updates have focused on fine tuning valuation assumptions for News Corp, with price targets trimmed rather than completely reset. That usually signals analysts are adjusting inputs like discount rates and P/E assumptions rather than changing their entire view of the business.

Bullish Takeaways

Bullish analysts still see enough earnings power to support a target that only moves by a few dollars. This suggests they view recent share price moves as more of a recalibration than a breakdown in the story.
The use of a higher future P/E multiple in updated models signals that some analysts are comfortable assigning a premium to News Corp relative to where it has traded at certain points, provided execution on core businesses holds.
Adjustments to targets have been incremental in size. This implies these analysts see room for the valuation to recover if the company can deliver on its operational and cost goals.
The focus on discount rates and multiples rather than cuts to assumed earnings can be read as confidence in the underlying earnings base, with the debate centered on what investors are willing to pay for those earnings.

Bearish Takeaways

Bearish analysts are signaling that the risk profile has shifted enough to justify higher discount rates, which directly reduces what they are willing to pay for the same stream of future earnings.
Price target reductions, including the larger cut reported in recent research, reflect concern that the current share price may have run ahead of what analysts think is supported by execution and growth visibility.
The decision to tweak both discount rates and the future P/E multiple highlights uncertainty about how consistently News Corp can deliver against expectations, especially if market conditions stay less supportive.
With targets moving lower, some bearish analysts appear more focused on downside protection than upside potential, emphasizing the need for clearer evidence of durable growth before assigning a richer multiple again.

What's in the News

Meta and News Corp signed a multiyear AI content licensing agreement, with Meta paying up to US$50m a year for at least three years to use News Corp content for AI training and outputs (Wall Street Journal).
From September 29, 2025 to December 28, 2025, News reported no share repurchases under the buyback program announced on July 15, 2025, with cumulative repurchases under that authorization remaining at 0 shares for US$0m.
Over the same period, News repurchased 6,300,000 shares for US$172.87m under the buyback announced on September 22, 2021, bringing total repurchases under that program to 42,500,000 shares, or 7.37% of shares, for US$954.77m.

Valuation Changes

Fair Value: model fair value remains unchanged at $34.05 per share, indicating no shift in the central valuation output.
Discount Rate: discount rate has risen slightly from 7.06% to 7.09%, reflecting a modestly higher required return in the model.
Revenue Growth: revenue growth assumption is effectively unchanged at 3.90%, with only a minimal numerical adjustment.
Net Profit Margin: net profit margin assumption remains stable at about 7.55%, with only a very small rounding difference.
Future P/E: future P/E multiple edges up slightly from 29.96x to 29.99x, signaling a marginally higher valuation multiple used in the updated model.

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Key Takeaways

Expanding digital services, strategic B2B partnerships, and high-value content licensing are driving stable, recurring revenue and margin improvement.
Portfolio streamlining and strong cost control are boosting operational efficiency, enabling greater free cash flow and enhanced capital returns.
Structural declines in print and legacy media, audience erosion for digital properties, increased AI-related risks, macroeconomic exposure, and reduced diversification threaten long-term revenue and stability.

Catalysts

About News

A media and information services company, creates and distributes authoritative and engaging content, and other products and services for consumers and businesses worldwide.What are the underlying business or industry changes driving this perspective?

News Corp's growing portfolio of digital and professional information services (e.g., Dow Jones Risk & Compliance and new B2B data analytics acquisitions) positions it to capture expanding demand for high-quality, business-critical information-future-proofing revenue growth and earnings stability through higher recurring digital subscription and data licensing income.
Strategic expansion in digital real estate (REA, realtor.com) is enabling margin expansion and robust revenue growth-even in a weak macro housing environment-by focusing on high-margin adjacency businesses (rentals, new homes, seller leads), which will further accelerate when market conditions normalize, driving headline growth and margin uplift.
Sustained growth in digital-only subscriptions across flagship media brands (e.g., The Wall Street Journal, The Times) supported by new B2B partnerships (LSEG) and improving pricing power, enhances recurring revenue streams and reduces churn, positively impacting both top-line growth and net margins.
Content licensing and anticipated AI/data partnership deals are creating new diversified revenue streams, leveraging News Corp's high-value intellectual property in an environment where digital and AI content consumption is rapidly expanding-supporting incremental revenue and long-term earnings growth.
Ongoing portfolio rationalization (e.g., Foxtel divestiture) and disciplined cost management are driving improved operational efficiency and expanding net margins, allowing for higher free cash flow and increased capital returns (accelerated $1.3 billion buyback), directly benefiting future EPS growth.

News Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming News's revenue will grow by 3.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 5.7% today to 8.1% in 3 years time.
Analysts expect earnings to reach $754.0 million (and earnings per share of $1.33) by about September 2028, up from $480.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $978.8 million in earnings, and the most bearish expecting $611.0 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 33.7x on those 2028 earnings, down from 34.5x today. This future PE is greater than the current PE for the US Media industry at 20.3x.
Analysts expect the number of shares outstanding to decline by 0.65% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.0%, as per the Simply Wall St company report.

News Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

News faces an ongoing structural decline in advertising and circulation for its print and legacy media assets (Book Publishing and News Media segments), with quarterly results already showing negative revenue growth and management citing difficult comparisons and soft market conditions, which may offset gains elsewhere and weigh on overall revenue and margin expansion in the longer term.
Audience engagement trends for key digital properties, such as Realtor.com, show declines in lead volumes and unique users (-13% and -3% respectively this quarter), suggesting risk that organic growth could be stalling and exposing the company's digital businesses to intensifying competition and potential audience/share erosion-directly impacting digital revenue trajectories.
The proliferation of AI-generated content and ongoing disputes over intellectual property licensing present long-term risks to News's content monetization model; should AI platforms divert content consumption away from News's paid offerings or if licensing and litigation outcomes are unfavorable, both top-line revenue and net margins could be pressured.
Despite strong current growth, News remains heavily exposed to cyclical macroeconomic segments (like real estate and advertising), with management acknowledging that continued outperformance at Digital Real Estate hinges on a housing market rebound; prolonged high interest rates or housing market stagnation globally could materially delay or undermine projected revenue and earnings growth.
Strategic portfolio simplification (such as the sale of Foxtel) has concentrated the business around fewer, albeit higher-margin, pillars, reducing diversification and potentially increasing long-term earnings volatility and downside risk should one core segment, such as Dow Jones or Digital Real Estate, experience unexpected disruption or downturn.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $37.522 for News based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $45.0, and the most bearish reporting a price target of just $28.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $9.3 billion, earnings will come to $754.0 million, and it would be trading on a PE ratio of 33.7x, assuming you use a discount rate of 7.0%.
Given the current share price of $29.42, the analyst price target of $37.52 is 21.6% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Digital Information And Real Estate Will Shape A Strong Future