Telegraph sale boosts valuation confidence in News Corp, says Morgan Stanley
Published: 21:51 05 Jun 2025 EDT
Morgan Stanley analyst Andre McLeod has reiterated his positive investment outlook on News Corp (NASDAQ: NWSA), citing increased conviction following the £500 million sale of the UK’s Telegraph Media Group.
“There was a time 10+ years ago when there was a lot of investor focus on NWSA’s newspaper portfolio, which was large and very profitable … but in recent years we find it is rarely raised by investors,” McLeod noted.
While Morgan Stanley currently attributes only 2–3% of its sum-of-the-parts valuation for News Corp to its newspaper holdings, McLeod pointed out that the Telegraph sale — involving a smaller, privately owned and less profitable publication — fetched about 1.9 times enterprise value-to-sales and 8.4 times enterprise value-to-EBITDA.
“Of course, it is difficult as an outsider looking in to understand the intricacies of what is included or excluded in that GBP500m number, but prima facie it makes our NWSA newspaper value look conservative,” he said.
Despite acknowledging the unique nature of each media asset transaction, McLeod said the deal strengthened his broader investment thesis. “We are not changing our earnings or valuation framework for the News Media division, because we recognise that each asset sale is unique. But, importantly, the Telegraph transaction does increase our conviction in our overall NWSA positive investment thesis, and our view that the shares are undervalued.”
Morgan Stanley maintains an Overweight rating on News Corp with a target price of US$37.
Shares in News Corp last closed at US$27.86.
