Media companies have been under significant pressure in recent years as advertising dollars increasingly flow to online competitors.
News Corporation (ASX: NWS) is quite different from traditional media companies, however.
While it does have a division of what you'd consider traditional media, which publishes newspapers and online news, it also holds a 61.4% stake in digital real estate company REA Group Ltd (ASX: REA), and has divisions that focus on business intelligence in Dow Jones, and oil market data in Dow Jones Energy.
The analyst team at UBS has run the ruler over the company's various divisions, and is predicting solid share price gains over the next 12 months – I'll get to that shortly.
Firstly, let's have a look at what they're saying about the company.
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Business data the key to growth
The UBS team said in their research note to clients this week that despite ongoing geopolitical tensions and AI uncertainty, "News Corp has continued to prove resilient, with the share price down 2% over the last 6 months despite REA down 17%''.
UBS said Dow Jones continued to be a key growth engine, delivering about 14% EBITDA on a compound basis over 2022-25.
The analysts said they see "meaningful headroom" for Dow Jones to grow and support double-digit EBITDA growth for News over the next three years.
As they said:
Across News Corp's earnings segments, Dow Jones has been the fastest-growing contributor to Group EBITDA between FY21-25, with its share increasing from 21% to 36%. While segment-level EBITDA drivers are difficult to break out, growth in DJ revenue has been primarily driven by DJ Risk (avg 15% yoy over FY23-25) followed by Energy (avg +13%yoy), reflecting ongoing demand for corporate risk data and commodities pricing insights amidst global geopolitical uncertainty and AI tailwind.
The Dow Jones Risk division provides proprietary anti-money laundering (AML) and know-your-customer (KYC) data, which UBS said is used by financial institutions, corporates, and government agencies worldwide.
They added:
Demand for both AML/KYC and sanctions data has accelerated in recent years, driven by heightened geopolitical risk, expanding regulatory complexity and broader adoption of AI-enabled compliance workflows, which are increasing the need for trusted, structured data sets.
UBS is predicting Dow Jones will increase its market share in this field from 9% to 12% by FY29.
On the energy front, UBS said Dow Jones Energy was likely to benefit from the ongoing oil supply chain disruptions caused by the Middle East conflict.
News Corp shares looking cheap
UBS has lowered its price target for News Corp shares from $58 to $56, which is still 34.2% higher than the current price of $41.74.
The company is valued at $23.04 billion.
