New York Times is not "failing": Here's why its stock may surge soon

The New York Times' stock has pulled back into a local correction, retreating from its year-to-date high of $87.18 to $75. The decline follows profit-taking after Berkshire Hathaway disclosed its stake in the company back in February. Even so, the underlying business remains strong, and that strength points to a likely rebound heading into earnings.

New York Times is not failing

President Donald Trump has always claimed that the New York Times business was failing. However, in reality, its business is booming, helped by its digital business, and its large market share in the media industry.

Unlike the Washington Post and LA Times, its business continues growing, with visitors on its website continuing to rise. Its total visits rose by 1% to 605 million in June, while The Washington Post and LA Times had 64 million and 25 million in the same period.

The most recent results showed that its business did well in the first quarter. Its digital-only subscription jumped by 16.1%, near the upper side of its range. Total subscription revenue rose by 11.3%, also higher than the guided range of between 9% and 11%.

NYT’s digital advertising revenue rose by 31%, while its advertising and affiliate, licensing and other revenues rose by 17% and 7.8%, respectively. These numbers are strong for a media company that has been in business in the last 175 years. 

Wall Street analysts suggest that its growth will continue, seeing modest growth, helped by Donald Trump’s news, upcoming midterm elections, and the resuming US-Iran war. 

The paper will also do well after the upcoming election, especially if Democrats win the House of Representatives and the Senate. They will intensify their investigations against Trump, including a potential impeachment. Polymarket data shows that there is a 66% chance that he will be impeached before his term ends.

NYT’s market share in the US and the potential revenue growth explains why it continues trading at a premium. Data shows that it has a forward price-to-earnings ratio of 28, higher than the communication sector average of 15. Its forward PEG ratio of 1.58 is also higher than the expected 1.23.

Analysts see some modest growth in the near term. UBS and Bank of America have a target of $80, while JPMorgan has a target of $82. The most optimistic analyst is Deutsche Bank, which noted that the stock may jump to $95. 

NYT stock price technical analysis

New York Times stock chart | Source: TradingView

The daily chart shows that the NYT stock has pulled back in the past few months, moving from the year-to-date high of $87 in April to $75 today. On the positive side, the stock has found support at the 200-day moving average.

The stock has slowly formed a bullish flag pattern, a common continuation sign in technical analysis. It is attempting to flip the red Supertrend indicator from red to green.

Therefore, the most likely scenario is where the stock continues rising as bulls target the year-to-date high of $87. Such a move would signal a 16% increase from the current level. The other potential target is $84, the 38.2% Fibonacci extension level.