News Corporation

The Business

News Corp is four businesses under one holding structure. Dow Jones (Wall Street Journal, Factiva, professional Risk & Compliance data) contributes roughly a third of group earnings and is transitioning from a media company into an information services provider. Digital Real Estate, anchored by a 62%-owned REA Group, holds over 90% share of the Australian property listings market and also owns the US portal Move. Book Publishing (HarperCollins) is a mature, cash-generative unit. News Media (mastheads, The Sun, The Times) is in structural decline and now contributes less than 8% of earnings.

Recent Performance

FY26 was a record year: EBITDA (earnings before interest, tax, depreciation and amortisation) rose to $1,627 million from $1,415 million, a margin expansion to 18.0% from 16.7%, while free cash flow jumped 42%. Management responded by accelerating the buyback to $643 million, four times the prior year's pace. That momentum is now largely reflected in how the stock trades, which raises the question of how much further good news the price can absorb before the story needs to deliver rather than merely continue.

Outlook

We expect revenue growth to run in the high single digits annually through FY28, driven by Dow Jones's Risk & Compliance data unit (currently $392 million, growing 16%, though we expect this to decelerate toward 8-10% by FY31) and continued REA yield growth. EBITDA margin is expected to keep expanding over the same period as the higher-margin segments grow faster than the shrinking newspaper business. The central question for the outlook is not whether these trends continue, most evidence suggests they will, but whether the market rewards Dow Jones with an information-services multiple as the transformation becomes more visible in the numbers.

Key Risks

REA Group's trading multiple is the single biggest swing factor in the investment case. Any compression in the multiple the market assigns to REA, whether from an Australian housing correction or a credible new competitor, would flow directly through to group value given how much of News Corp's worth sits in that one asset. Murdoch family control, at 34.5% of voting rights, means the theoretical break-up value of the conglomerate is structurally unrealisable: investors should not expect any value gap between the parts and the whole to close through activist pressure or corporate action. If Dow Jones's compliance data growth slips below the high single digits, the information-services rerating thesis weakens materially and the segment risks being valued back toward a media multiple rather than a data multiple.

What to Watch

The thesis-defining event is whether Dow Jones's Risk & Compliance revenue sustains double-digit growth through FY27, which would validate the case for the market to value Dow Jones like an information services business rather than a newspaper publisher.

• Nov 2026 Q1 FY2027 results — first read on whether FY26's margin momentum carries into the new year.
• Next 12 months US Federal Reserve rate cuts — lower mortgage rates would lift Move's housing-sensitive volumes.

Latest Developments

FY26 results confirmed record group profitability and a sharply accelerated buyback, both already reflected in the current share price. No material developments have occurred since that result to change the picture.

Company Description

News Corp is organised into four operating divisions. Dow Jones (roughly a third of group EBITDA) houses the Wall Street Journal alongside Factiva, OPIS energy pricing data and a fast-growing Risk & Compliance business selling regulatory data to banks and corporates. Digital Real Estate (also around a third of EBITDA) consists of a 62% stake in ASX-listed REA Group, the dominant Australian property portal, plus the US portal Move, which trails market leader Zillow. Book Publishing (HarperCollins) contributes a stable, high-cash-conversion slice. News Media, the traditional mastheads including The Sun and The Times, now makes up less than a tenth of earnings and is shrinking.

Where the Growth Is

The single most important growth driver is Dow Jones's Risk & Compliance segment: $392 million in revenue, growing 16% currently, embedded in bank and corporate compliance workflows with subscription-like retention. We expect this growth to decelerate toward 8-10% by FY31 as the base scales, still lifting Dow Jones EBITDA meaningfully over that period. Whether the market reclassifies Dow Jones from a media multiple to an information-services multiple as this growth persists is the single largest open question in the investment case, and it is a structural shift rather than a one or two-year cyclical swing if it happens.

Competitive Position

REA Group's competitive position is the strongest asset in the portfolio: over 90% share of the Australian residential property listings market, with pricing power that shows up as yield growth running well ahead of listing volumes, a signal of a genuine network-effect monopoly rather than cyclical strength. That position has been stable for over a decade and we see no credible challenger within a five-to-seven year horizon. Dow Jones's position is improving but less entrenched: its data products create real switching costs for compliance customers, but the newspaper heritage still anchors its valuation multiple below pure-play information peers. News Media has no meaningful competitive advantage left; it survives on cost discipline rather than growth.

Management & Capital Discipline

Management's capital allocation over the past year has been aggressive and, on the evidence, well-timed: the Foxtel divestiture simplified the portfolio, and the buyback was accelerated to $643 million, four times the prior year's rate, while the balance sheet stayed net cash. The honest counterpoint is that Dow Jones's own $1 billion EBITDA target looks somewhat ahead of what bottom-up modelling of current growth rates supports by FY31, suggesting management's medium-term ambition is running slightly hotter than the underlying growth rate can currently deliver.

Financial Position

The balance sheet is a genuine strength: News Corp carries a net cash position and has ample liquidity, giving it room to keep buying back stock and fund bolt-on acquisitions without stretching the balance sheet. This financial flexibility means the company can comfortably absorb a housing downturn or an advertising slump in News Media without any risk to the dividend or the buyback programme.