Can New York Times Beat Estimates in Q4?
New York Times (NYSE: NYT) is scheduled to report its fiscal fourth-quarter results on Thursday, February 6.
For full-year 2019, Trefis estimates that the company will report:
- Revenues of $1.8 billion, reflecting 4% y-o-y growth, primarily driven by growth in digital revenues. Our revenue forecast is in-line with the consensus estimate.
- EPS figure will likely be $0.79, due to marginally higher revenues. Our EPS figure forecast is slightly higher than the consensus estimate of $0.78.
Our forecast indicates that NYT’s valuation is $32 a share, which is slightly below the current market price of around $33. Look at our interactive dashboard analysis on NYT’s Pre-Earnings: What To Expect in Q4? for more details.
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- Up 47% Since Beginning of 2023, How Will NY Times’ Stock Trend After Q4 Earnings?
- Up 28% This Year, How Will NY Times’ Stock Trend Following Q3 Results?
- NY Times’ Stock To Likely See Little Movement Post Q2
- NY Times’ Stock To Likely Trade Lower Post Q1
(1) Revenues expected to be in-line with consensus estimates
Trefis estimates NYT’s 2019 revenues to be $1.82 billion, almost in-line with the consensus estimate of $1.81 billion
(1) Subscriptions $1.1 Bil (60%)
(2) Advertising $0.6 Bil (31%)
(3) Others $0.2 Bil (9%)
= Trefis Estimate $1.8 Bil vs Consensus $1.8 Bil [Surprise $0 Bil]
NYT’s revenues are expected to increase 4% year-over-year to $1.8 billion. This growth is expected to be driven by higher subscriptions for the company’s digital products, increased commercial printing, and rental revenue, partially offset by lower print advertising revenues. NYT has been witnessing a surge in its digital subscriptions since the 2016 U.S. Presidential elections and has been able to sustain growth since then.
(2) EPS likely to narrowly beat consensus estimates
NYT’s 2019 earnings per share (EPS) expected to be $0.79 per Trefis analysis, slightly higher than the consensus estimate of $0.78 per share
Total Revenues $1.8 Bil
– Total Expenses $1.7 Bil(*)
= Net Income $133 Mil
÷ Shares Outstanding 168 Mil
= EPS $0.79 vs Consensus $0.78 [Surprise $0.01]
(*) – The expense figure includes preferred dividend and other minority expenses
As we forecast NYT’s Revenues to grow at a relatively faster rate than Expenses in 2019 (4.1% vs. 4.0%), this will result in a 10 bps increase in NYT’s Net Income Margin figure from 7.2% in 2018 to 7.3% in 2019 as detailed in the chart.
(3) Stock price estimate ~2% lower than the market price
Trefis forecast for NYT’s 2019 earnings is slightly higher while P/E multiple is marginally lower than the market expectations, working out to a fair value of $32 for NYT’s stock, which is roughly 2% lower than the current market price of around $33. A trailing P/E multiple of 40.7x looks appropriate for NYT’s stock, which is slightly lower than the current implied P/E multiple of 41.8x
We use our full cash flow model for NYT to arrive at a P/E multiple of 40.7x for a price estimate of $32.
Note: P/E Multiples are based on Share Price at the end of the year, and reported (or expected) Adjusted Earnings for the full year
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