NEW YORK — Shares of News Corp. and its film and broadcasting arm Fox Entertainment Group both got a shot in the arm Tuesday, following upbeat comments from a closely watched media analyst.
Morgan Stanley Dean Witter analyst Richard Bilotti boosted his investment rating to “strong buy” from “neutral” for the Australian media giant, and to “outperform” from “neutral” for Fox Entertainment Group. News Corp. gained 3.5% in Tuesday’s trading, while Fox tacked on nearly 7%.
The Wall Streeter cited News Corp.’s cheap valuation relative to media-sector peers, its aggressive plans to reduce debt levels in the coming year and the resolution of sports-rights issues at Fox. As for the discrepancy in the two upgrades, Bilotti said News Corp. has a better chance of staging a rebound from recent lows.
News Corp. tumbled nearly 30% from its high near $40 last summer, as sharp declines in the advertising market, a lagging economy and the Sept. 11 attacks all took their toll.
The declines accelerated last month, after the company said it would take a writedown of more than $900 million because of costly sports contracts for football, baseball and NASCAR.