US Equities Analysis

NWSA — News Corp (Class A)

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 10.11%
Profit Margins 12.92%
Return on Equity 6.52%
Return on Assets 4.11%
Free Float 0.55B
Dividend Yield 0.79%
Short Int % Utilisation 4.45%

2.2 Growth

Metric Value
Revenue Growth 8.8%
Free Cash Flow 1.74B
EBITDA 12.95 (Ratio)
Enterprise Value 16.21B
EV/Revenue 1.84
EV/EBITDA 12.95

Revenue growth of 8.8% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 3.49%
Risk / Std Dev (Ann.)* 27.27%
1-Year Price Return* -0.30%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $29.16
52-Week Range $22.20 – $31.61
Observation Count 249 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $9.03B
Prior annual revenue $8.45B
EBIT $1.14B
Tax rate 28.90%
NOPAT = EBIT × (1 − tax rate) $811.96M
Forecast start-growth basis 6.81%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $811.96M
Add: depreciation & amortisation $485.00M
Less: capital expenditure -$426.00M
Less/(add): working-capital cash-flow movement -$145.00M
Current unlevered FCFF $725.96M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 6.81% $867.30M $518.05M -$455.03M -$154.88M $775.44M $742.50M
2 5.74% $917.05M $547.77M -$497.79M -$163.77M $803.26M $705.20M
3 4.66% $959.76M $573.28M -$538.41M -$171.39M $823.23M $662.66M
4 3.58% $994.11M $593.80M -$575.74M -$177.53M $834.64M $615.98M
5 2.50% $1.02B $608.64M -$608.64M -$181.97M $836.99M $566.37M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.91
Cost of equity 9.72%
Pre-tax cost of debt 7.71%
WACC 9.07%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $13.06B
Implied terminal EV / EBITDA 6.40x
Terminal value as % of enterprise value 71.99%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $3.29B
Present value of terminal value $8.46B
Indicated enterprise value $11.76B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $11.76B
Less: gross interest-bearing debt $2.92B
Add: cash and equivalents $2.10B
Add: affiliate investments $0.00
Less: minority interests $710.00M
Indicated common equity value $10.23B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 558,400,000.00
Share-count basis reported diluted weighted-average shares
Current market price $29.50
DCF indicative value per share $18.32
Indicative value vs. market price -37.92%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:44:18.947766 UTC; latest reported fiscal period: 2026-06-30 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -22.04% -13.65%
Adjusted R² 0.05 0.07
Annualised residual volatility 24.96% 24.55%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.24 (1.63) 0.45 (2.73)
Size (SMB) 0.48 (2.40) 0.51 (2.44)
Value (HML) -0.16 (-0.91) -0.34 (-1.62)
Profitability (RMW) NM 0.41 (2.32)
Investment (CMA) NM 0.23 (0.75)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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