Shares of News Corp. have been shredded due to the News Of The World hacking scandal.
Citigroup’s media analyst Jason B Bazinet says the stock is now “Too Compelling To Ignore.”
Here’s the maths:
- “After removing BSkyB from our ’12 estimates, removing News of the World and adding $5 billion buyback, our ’12 EPS estimates unchanged at $1.36. Our ’13 EPS estimates move from $1.61 to $1.79.”
- “We cannot rule out adverse headlines crossing the tape. But, we see few (if any) scenarios that would result in permanent damage of News Corp’s existing assets. With BSkyB, News trading at 9.8x calendar ’12 EPS; without BSkyB and larger buyback News Corp at 7.0x fiscal ’13 EPS. This valuation is too compelling to ignore.”