News Corp. (NWSA) shares are trading sharply lower on investor disappointment with the company’s guidance. The company said Q4 operating income would be down from a year ago, an outcome the Street had not expected. While March quarter results beat expectations, thanks in no small measure to Avatar, Street analysts were not happy with the outlook, and many sliced estimates.
J.P. Morgan analyst Imran Khan cut his rating on the stock to Neutral, from Overweight, reducing his price target to $16.50, from $17.50. “In the medium-term, we think strength in cable networks will be offset by challenges at the Fox Broadcast Network, difficult comps for the film studio, continued operating losses in digital businesses and FX headwind,” he writes in a research note. Khan sees Discovery (DISCA) and Viacom (VIAB) as offering “a more attractive way to play the advertising recovery.”
NWSA is down $1.19, or 7.7%, to $14.21.
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