News Corp, a global diversified media and information services company, publishes prominent news outlets, operates business information databases, and holds significant stakes in digital real estate and book publishing businesses. The Murdoch empire’s unique dual-class share structure presents complex valuation signals. News Corp’s Class B voting shares currently trade at a 15 per cent premium to its non-voting shares, a spread that widened this year. In contrast, Fox Corporation’s voting shares maintain a near 10 per cent discount. While some analysts suggest this News Corp premium might signal future reorganisation, others, including Citi’s Jason Bazinet, attribute these differences to technical factors.
A significant factor in News Corp’s market perception has been the “Murdoch discount,” largely tied to its 61 per cent stake in ASX-listed real estate classifieds giant REA Group. Historically, REA’s value often dominated News Corp’s market capitalisation, accounting for up to 75 per cent and overshadowing other business units. However, REA’s recent dramatic share price decline – down 47 per cent from its 52-week high amid AI fears and property downturn concerns – is altering this dynamic. This period for REA has reduced its contribution to News Corp’s market value to about 50 per cent, potentially bringing greater focus to the group’s remaining assets.
Among these, the Dow Jones business is garnering significant investor excitement. Publishing The Wall Street Journal and Barron’s, and operating the Factiva database, Dow Jones contributes a third of News Corp’s profits and exhibits strong growth. News Corp aims for Dow Jones to achieve US$1 billion in earnings before interest, tax, depreciation and amortisation within five years. UBS analysts remain optimistic about Dow Jones’s professional information segment, valuing it at 22 times earnings. All nine analysts covering News Corp hold buy ratings, with an average price target nearly 40 per cent above current levels, suggesting substantial potential despite the enduring “Murdoch discount.”
