"We view News Corp. (NWS, NWSA) as a classic media value play, as its individual pieces are undervalued, but provide downside protection for the stock," says analyst John Janedis, initiating with a Buy and $22 price target.
"We expect fundamentals to improve, which should translate to multiple expansion in the stock ... Longer-term, similar to other media companies, we think NWSA could spin off assets to create value. In our view, NWSA is not the newspaper value trap of years past due to the value of REA, Foxtel, Harper Collins, and cash balance."
"Given valuation of the stock, we think a successful outcome [of strategic initiatives] is currently priced into the stock at current levels," he says, starting New York Times (NYT) with a Hold and $15 price target.
"We think the combination of tepid ad growth and the regulatory overhang will continue to slow the acquisition pipeline and constrain multiple expansion," he says, starting Nexstar Broadcasting (NXST) at Hold with $48 price target. "While 2014 will be a big year for political advertising, we do not see significant upside to our estimates."
Gannett (GCI) is initiated with a Buy.
Previously: Jefferies launches coverage on media names