ASX 200 communications stock News Corporation CDI (ASX: NWS) hit a new record high on Tuesday.
The News Corporation share price rose by 2.72% to an intraday high of $52.19 before closing at $51.74.
By comparison, the S&P/ASX 200 Index (ASX: XJO) fell 0.06% on Tuesday to finish at 8,374 points.
News Corporation did not release any price-sensitive news today.
However, a positive note from top broker UBS may have sent the ASX 200 stock to its new all-time high.
UBS has raised its rating on News Corporation shares from neutral to buy.
The broker has also upgraded its 12-month share price target on the media giant to $64.50.
This implies a 23.6% potential increase from the new all-time high share price set today.
UBS analyst Evan Karatzas said he expects News Corporation to generate a 3-year earnings per share CAGR of 21%, largely driven by the Dow Jones, REA Group Ltd (ASX: REA), and debt reduction.
He commented:
With the one-year forward P/E of 30x relatively reasonable, we think the EPS growth alone can be a driver of acceptable share price returns even without multiple expansion.
Karatzas views News Corporation's sale of Foxtel as "a clear positive".
He noted that getting rid of Foxtel will improve the company's free cash flow, given Foxtel's significant capital intensity, as well as reduce its debt.
UBS has also changed its ratings on a number of other ASX 200 media stocks.
The broker has cut its rating on Nine Entertainment Co Holdings Ltd (ASX: NEC) shares from buy to neutral with a 12-month price target of $1.45.
Karatzas said:
Nine remains in a difficult position with the combination of ever escalating content costs with a very challenging macro advertising environment.
Over the last 3yrs (FY22-25e), EPS has declined by c.30% reflecting these challenges.
Nine Entertainment shares closed at $1.285 on Tuesday, down 1.91%.
UBS also cut its rating on ASX 200 stock oOh!Media Ltd (ASX: OML) to neutral with a price target of $1.25.
Karatzas said:
We acknowledge the clear OOH advertising structural tailwinds (CY24 +8% vs. industry -3%) and OML trading relatively inexpensively.
However, until we get evidence that the company's significant market share losses of CY24 can be reversed or at least stabilise we don't have comfort OML can deliver an appropriate ROIC on what remains a significant level of capex spend (c.10% of sales).
The oOh!Media share price finished today's session at $1.11, down 3.06%.
UBS maintained its neutral rating on Southern Cross Media Group Ltd (ASX: SXL) but lifted its share price target from 56 cents to 64 cents.
The broker maintained a sell rating on Seven West Media Ltd (ASX: SWM) with a slightly improved price target of 15 cents, up from 14 cents.
It also maintained a sell rating on ARN Media Ltd (ASX: A1N) but raised its share price target to 57 cents, up from 51 cents.
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