Buy News Corp. (NASDAQ:NWSA) on Weakness Says Nomura, Catalysts Coming

Nomura Securities recommends buying News Corp. (NASDAQ:NWSA) on any weakness before expected catalysts in 2011 drive the stock up.

Nomura says, "We believe investors should be buying NWS on any weakness as we anticipate these levels present an attractive entry point before a number of catalysts emerge over the year. The growth of Cable Networks is being hurt by tough compares at the other divisions which should subside by the end of the March quarter. Assigning an 8.5x multiple for the Cable Networks would imply the remaining assets are trading at less than 2x.

"As we start cycling through the tough Avatar compares in Filmed Entertainment over the next couple of quarters, the Cable Networks’ operating profit will start to have an even greater impact. In addition, we anticipate losses at MySpace will be reduced either organically or through disposition, which will also improve overall profit growth. Lastly, clarity for NWS’ potential acquisition of BSkyB, which we assume will occur in summer 2011, should also help the share price as well as lift the company’s growth and profit predictability. We would be buyers in advance of these catalysts."

Nomura Securities maintains a "Buy" rating on News Corp., which was trading at $15.91, down $0.06, or 0.38 percent, as of 1:35 PM EST. Nomura raised their price target on Nomura from $18.50 to $20.