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On Thursday, Deutsche Bank (ETR:DBKGn) analysts, led by Benjamin Soff, reaffirmed their Buy rating on New York Times (NYSE:NYT) shares with a steady price target of $65.00. According to InvestingPro data, this target represents a 35% upside from the current price of $48.17, though the stock has experienced an 8.95% decline over the past week. The company’s Fair Value analysis suggests the stock is currently fairly valued. Soff expressed confidence in the company’s direction as it moves into 2025, citing anticipated healthy growth in digital subscribers, with an estimate of 1.2 million net additions, and a revenue increase of 6.3% year-over-year. He also expects margin expansion of 89 basis points year-over-year and a strong free cash flow (FCF) increase of 12.1% year-over-year. This outlook aligns with the company’s strong track record, as InvestingPro data shows a healthy 7.78% revenue growth in the last twelve months and an impressive Financial Health Score of 2.78 (labeled as "GOOD").
The New York Times’s first-quarter guidance for 2025 was robust, surpassing Deutsche Bank’s previous revenue and adjusted operating profit (AOP) estimates by 1.1% and 1.5%, respectively, at the midpoint. The company has reiterated its multi-year outlook, which includes reaching 15 million total subscribers, achieving 9-12% annual AOP growth, and promising shareholder returns exceeding 50% of FCF through 2027.
Additionally, The New York Times announced enhancements to its shareholder return program. This includes authorizing an additional $350 million for share repurchases, which takes the total authorization to over $500 million when combined with the existing program. Furthermore, the company is increasing its dividend per share to 18 cents starting in the first quarter of 2025. This represents a significant rise of 38.5% year-over-year from the 13-cent quarterly dividend provided in 2024. InvestingPro analysis reveals the company has maintained dividend payments for 13 consecutive years, with six straight years of increases. Get access to more exclusive ProTips and comprehensive financial metrics by subscribing to InvestingPro.
The company’s strategic updates and financial guidance underscore its commitment to growth and shareholder value as it continues to navigate the evolving media landscape.
In other recent news, the New York Times Company has seen adjustments in stock targets from both Guggenheim and Deutsche Bank. In the wake of the company’s fourth-quarter earnings report, Guggenheim reduced its price target from $55.00 to $52.00, maintaining a Neutral rating. The company’s revenues of $727 million and adjusted operating income of $170 million were close to Guggenheim’s projections, despite slightly higher operating costs. Guggenheim also noted a shortfall in the gain of digital news product subscribers, with 140,000 added instead of the projected 200,000. Looking ahead, the firm remains cautious with its 2025 forecast for net additions to core news subscribers, while expecting continued growth in digital-only Average Revenue Per User (ARPU).
On the other hand, Deutsche Bank raised its price target for New York Times stock to $67 from $66, reaffirming a Buy rating. This increase reflects minor yet positive adjustments in total revenue and Adjusted Operating Profit (AOP) forecasts for the fourth quarter of 2024. The bank also anticipates the New York Times to align closely with the higher end of its quarterly guidance ranges and has slightly increased multi-year estimates for the company. These recent developments provide investors with a mixed perspective on the New York Times Company’s financial trajectory.
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