Broadcast, Web Should Drive News3/30/2007 8:00 PM Eastern
Pali Capital media analyst Richard Greenfield maintained his “buy” rating and raised his 12-month price target on News Corp. to $27 per share from $24 per share, citing the pending approval of its swap of its controlling interest in DirecTV Group with Liberty Media.
News Corp. shareholders are expected to vote on the transaction — which will give News Corp. about 513 million shares of its own voting stock previously held by Liberty — on April 3. Greenfield expects News Corp. shareholders to approve the deal, but added that it is not expected to officially close until late June or early July.
In addition, Greenfield outlined key issues he urged investors to watch for in the coming months: strong ratings growth at its Fox broadcast network, fueled by shows such as American Idol and Are You Smarter Than a Fifth Grader?; continued growth at its MySpace social-networking business; continued growth at its Sky Italia and Star TV satellite-television businesses; and the coming launch of its Fox Business Channel.
Greenfield wrote that he expects Fox Business, expected to launch in the fall, to generate about $75 million in losses during its first year.
Greenfield added that while there appears to be opportunity in launching the business channel, he couched his enthusiasm for the network, pointing out that News Corp. executive Roger Ailes — who heads the successful Fox News Channel as well as Fox Business — was also most recently responsible for the unsuccessful launch of MyNetwork TV.