News (NWS:NAS) Fundamental Valuation Report

Fundamental Valuation Report


Consumer Cyclical:Broadcasting-TV

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Close Price/Date
$13.02 (USD) 24/10/2018

Weighted Valuation
$14.29 (USD)

Overall Rating
Undervalued by 9.7%

Valuation Models Analyst Consensus: $16.50 (USD)
(in order of importance) Adjusted Book Value: $11.20 (USD)
Multiples: $13.83 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (NWS:NAS USD)

Price 0.00
Range 0.00 – 0.00
52 week 0.00 – 0.00
Open 0.00
Vol / Avg. 0/0
Mkt cap 0
P/E 0.00
Div/yield 0.00/0.00
EPS 0.00
Shares 0
Beta 0.00

Company Description

News Corporation is a media conglomerate with a large presence in the U.S, the U.K., and Australia. Key brands include The Wall Street Journal, Herald Sun, and The Times. The company also has a strong presence in the Australian pay-TV market through Fox Sports and Foxtel (both 65%-owned), while its 62%-owned REA Group is the dominant real estate classified business in Australia. In addition, it owns HarperCollins, one of the largest book publishers globally, and also has a substantial digital property advertising business (Move) in the U.S. The company’s operations are organized into five reporting segments namely News and Information Services, Book Publishing, Digital Real Estate Services, Subscription Video Services and, Other.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for NWS:NAS

Using a discounted cash flow model we generated an intrinsic value of $25.16 (USD) for NWS:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

NWS:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $25.16 1% 5% 1% 5%
WACC (or Ke) 11.60 $28.57 $22.46
Terminal Growth Rate 3.00 $22.87 $28.05
Tax Rate 0.16 $26.60 $23.71
Cash Flow 1,570,942,829 $23.96 $26.35
Capital Expenditures 49,200,000 $25.19 $25.12
Long Term Debt 377,000,000 $25.19 $25.12

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $11.88 (USD) for NWS:NAS. We also generated a valuation of $21.46 (USD) using other metrics and comparables.
The comparable companies were Liberty Formula One Group (FWONA:NAS), Nexstar Media Group (NXST:NAS), Sinclair Broadcast Group (SBGI:NAS), Tegna (TGNA:NYS) and Tribune Media (TRCO:NYS).

Company NWS:NAS End Date Value
Earnings/Share ($2.60) (USD)
Book Value/Share $15.89 (USD)
Sales/Share $15.49 (USD)
Cash Flow/Share $1.30 (USD)
EBITDA/Share ($1.05) (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$27.98 (USD) -85.6
$31.95 (USD) -43.2
$16.35 (USD) -31.7
$0.00 (USD) 16.5
0.00 PE Ratio 8.85 20.63 6.86 5.27 5.18 6.30
0.86 PB Ratio 1.76 1.45 2.27 1.79 2.31 0.99
0.88 PS Ratio 2.06 4.64 1.52 1.02 1.31 1.82
10.47 PCF Ratio 15.16 40.08 11.03 5.34 8.73 10.63
0.00 EV to EBITDA 12.22 30.44 8.72 6.13 8.77 7.04


Using a multiples approach we generated a valuation of  $13.83 (USD) for NWS:NAS

Company NWS:NAS End Date Value
Earnings/Share ($2.60) (USD)
Book Value/Share $15.89 (USD)
Sales/Share $15.49 (USD)
Cash Flow/Share $1.30 (USD)
EBITDA/Share ($1.05) (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$11.10 (USD) 0
$15.06 (USD) 0
$15.33 (USD) 0
$0.00 (USD) 0
Ratios Ratio Average
PE Ratio 37.07
PB Ratio 0.70
PS Ratio 0.97
PCF Ratio 11.80
EV to EBITDA 7.67

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  NWS:NAS for the last 5 years was  0.70

We ran the Adjusted Book Value for  NWS:NAS and generated a book value of  $15.97 (USD)
By multiplying these we get an adjusted valuation of  $11.20 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for NWS:NAS. The 1 analysts have a concensus valuation for NWS:NAS for 2019 of $16.50 (USD).


Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 4 0 3.0000 Hold 2018-10-23

Current Price: 13.02 USD

Analyst Consensus
USD Millions 2019 2020
Mean EPS 0.40 0.59
# EPS Analysts 4 4
Mean Revenue 10,490.80 10,734.20
# Revenue Analysts 3 3
Mean Target Price 16.50
Mean Cash Flow 2.08 1.98
Mean EBITDA 1,320.10 1,452.80
Mean Net Income 231.60 340.10
Mean Debt Outstanding
Mean Tax Rate
Mean Growth Rate 26.34
Mean Capital Expenditure 630.90 568.20

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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