Results: News Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts
It's been a good week for News Corporation (NASDAQ:NWSA) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.6% to US$25.84. It looks like a credible result overall - although revenues of US$2.6b were what the analysts expected, News surprised by delivering a (statutory) profit of US$0.27 per share, an impressive 47% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for News
Taking into account the latest results, News' twelve analysts currently expect revenues in 2024 to be US$10.1b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 72% to US$0.69. Before this earnings report, the analysts had been forecasting revenues of US$10.1b and earnings per share (EPS) of US$0.64 in 2024. So the consensus seems to have become somewhat more optimistic on News' earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.4% to US$29.20. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values News at US$36.00 per share, while the most bearish prices it at US$22.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that News' rate of growth is expected to accelerate meaningfully, with the forecast 2.1% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 3.3% annually. So it's clear that despite the acceleration in growth, News is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards News following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on News. Long-term earnings power is much more important than next year's profits. We have forecasts for News going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for News that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
