Stock Analysis & Valuation News Corporation (0K7U.L)

• Previous Close: £26.73
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	26.50	-1
Intrinsic value (DCF)	13.05	-51
Graham-Dodd Method	10.10	-62
Graham Formula	16.50	-38

Strategic Investment Analysis

Company Overview

News Corporation (0K7U.L) is a global media and information services powerhouse, delivering authoritative content across multiple platforms. Headquartered in New York, the company operates through six key segments: Digital Real Estate Services, Subscription Video Services, Dow Jones, Book Publishing, News Media, and Other. Its portfolio includes iconic brands like The Wall Street Journal, Barron's, MarketWatch, and The Times, distributed via newspapers, digital platforms, and live journalism. News Corp also owns HarperCollins, a leading book publisher, and REA Group, a top digital real estate platform. With a diversified revenue stream from subscriptions, advertising, and licensing, the company serves consumers and businesses worldwide. As part of the Technology sector, News Corp leverages digital transformation to enhance its content delivery and monetization strategies. Its strong brand equity and global reach position it as a key player in the evolving media landscape.

Investment Summary

News Corporation presents a mixed investment case. On the positive side, its diversified revenue streams, strong brand portfolio (Dow Jones, HarperCollins, REA Group), and digital transformation efforts provide stability. The company generates solid operating cash flow ($1.1B) and maintains a reasonable debt profile. However, risks include exposure to declining print media, cyclical advertising revenues, and intense competition in digital content. The stock's beta of 1.3 indicates higher volatility than the market. While the dividend yield (~1.2%) offers some income appeal, growth investors may find the modest EPS ($0.46) and net income ($266M on $10.1B revenue) underwhelming. The investment thesis hinges on successful digital monetization and cost management in transitioning legacy businesses.

Competitive Analysis

News Corporation competes in fragmented but highly competitive media markets. Its competitive advantages include: 1) Premium content brands with strong reader loyalty (WSJ, The Times), 2) Diversification across B2B (Dow Jones) and B2C segments, 3) Leading positions in niche markets (Australian real estate via REA Group), and 4) Cross-platform content distribution capabilities. However, it faces structural challenges versus digital-native competitors in advertising efficiency and user engagement metrics. In digital real estate, REA Group dominates Australia but competes with global platforms expanding locally. The Dow Jones segment maintains pricing power in financial data but battles Bloomberg and Refinitiv in enterprise solutions. Book publishing benefits from HarperCollins' backlist but struggles with Amazon's disruption of retail channels. News Media remains the most challenged segment, requiring continuous cost restructuring amid print declines. The company's scale provides some insulation, but its tech stack and data capabilities trail pure-play digital media firms. Success depends on leveraging trusted journalism brands while accelerating digital subscription growth and platform partnerships.

Major Competitors

• The Walt Disney Company (DIS): Disney dominates entertainment content and streaming (Disney+), competing directly with News Corp's Foxtel in Australia and Sky News internationally. Its superior scale in film/TV production and theme parks creates cross-promotional opportunities News Corp lacks. However, Disney has minimal presence in business information or newspapers where News Corp specializes.
• News Corp (Class A) (NWSA): The NASDAQ-listed share class of News Corp represents the same underlying business as 0K7U.L. Both track identical operational performance but may trade at slight valuation differences due to liquidity and investor base variations between the LSE and NASDAQ.
• News Corp (Class B) (NWS): The Class B shares have different voting rights but identical economic exposure to 0K7U.L. Institutional investors often prefer the more liquid NASDAQ listings, while 0K7U.L caters to European investors seeking USD-denominated media exposure.
• Thomson Reuters Corporation (TRI): A key rival in business information, Thomson Reuters competes with Dow Jones in financial data (Refinitiv vs. Factiva) and legal/professional markets. Its larger scale in enterprise solutions and AI-driven research tools pose challenges, though News Corp maintains stronger consumer media brands.
• RELX PLC (RELX.L): This UK-based professional information giant competes in scientific/medical publishing (Elsevier) and risk analytics. While not a direct competitor in consumer media, RELX's success in digitizing B2B information services highlights opportunities News Corp could pursue more aggressively in Dow Jones.
• Zillow Group (ZM): In digital real estate, Zillow challenges REA Group with superior US market penetration and tech innovation. However, REA maintains near-monopoly status in Australia, where regulatory barriers protect its position against global rivals like Zillow.
• Amazon.com (AMZN): Amazon disrupts both book publishing (via self-publishing and Audible) and advertising markets. Its dominance in e-book distribution pressures HarperCollins' margins, while AWS hosts competing media platforms that fragment audience attention from News Corp properties.
• The New York Times Company (NYT): A pure-play digital subscription success story, the NYT demonstrates the potential for newspaper brands to transition online. Its 10M+ digital subscribers outpace News Corp's paywalls, though News Corp benefits from more diversified revenue streams beyond journalism.