News Corp gains, Nine falls on UBS ratings changes
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The news: Shares in News Corporation climbed in morning trade on the ASX as UBS upgraded its rating on the stock.
However, fellow media groups Nine Entertainment and oOh!media lowered after being hit by downgrades.
The numbers: News Corp shares were up 1.8% to $51.72 by 11:50am AEDT. UBS upgraded its rating from 'neutral' to 'buy', with a $64.50 price target.
Nine shares were down 1.2% to $1.30 and oOh!media shares fell 1.5% to $1.13. UBS downgraded both companies from 'buy' to 'neutral', with respective price targets of $1.45 and $1.25.
The context: UBS analyst Evan Karatzas said New Corp's Foxtel sale is a "clear positive", lending the group improved free cash flow generation, stronger balance sheet and simplifying the overall business.
He also noted that the market is "not fully factoring" in the growth potential of New Corp's publishing firm Dow Jones.
Karatzas noted that Nine "remains in a difficult position with the combination of ever escalation content costs with a very challenging macro advertising environment." However, the company's current strategic review could help realise the value within its ownership of real estate platform Domain, he said.
Meanwhile, UBS downgraded oOh!media due the company's "significant market share losses" in 2024, despite shares in the outdoor advertising firm trading "relatively inexpensively".
The source: UBS research
