Fox Shares Rise In NASDAQ Debut

But Publishing Concerns Drive Down News Corp. Stock
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Shares of 21st Century Fox were up in their market debut July 1, but publishing venue News Corp. lagged, dipping 3.3% after completing their planned split on June 28.

News Corp. announced its intention to split its publishing, television and film assets into two separate companies in June 2012. As a result of the June 28 split, News Corp., consisting of newspaper assets such as The Wall Street Journal,New York Post and the Times of London, and book publisher Harper Collins, began trading on the NASDAQ Exchange under the symbol NWS. Television asses such as cable networks Fox News Channel and FX, along with Fox Broadcasting and film unit 20th Century Fox, are housed under the 21st Century Fox umbrella and began trading under the symbol FOXA on July 1.

Fox shares officially opened July 1 at $28.77 per share and rose as high as $29.87 (up 3.8%), before settling to $29.40 (up 2.2%). News Corp. shares debuted at $15.48 per share and rose slightly to $15.50 each in earlier trading before falling back to $14.87 each , down 51 cents or 3.3%.

Analysts for the most part have been bullish on the split. In a research note on June 28, Lazard Capital Markets analyst Barton Crockett put a “buy” rating and a $34 per share 12-month price target on 21st Century Fox, noting that 65% of the units’ revenue comes from cable networks.

“Over the next several years, we see an affiliate renewal cycle, and the benefit of domestic and international networks investments driving at least low double digit annual increases in profitability, despite high single digit growth in expenses from channel re-brands,” Crockett wrote. “Longer-term, we see sustained annual growth in profits of 9-10%, with Cable eventually representing more than 70% of overall Fox profits.”

He added that successful rebranding efforts for its new networks – Fox Sports 1 and FXX – could provide further upside to Crockett’s estimates.