Speculation was rife that property listing group CoStar (NASDAQ:CSGP) is in talks to acquire Move, the operator of Realtor.com, from News Corp (NASDAQ:NWSA) for approximately $3 billion. However, putting all speculation at rest, CSGP CEO Andrew Florance said during the Q4 earnings call that his company is not acquiring Move. NWSA stock closed 3.89% lower on Tuesday. Moreover, it is down about 1.97% in the pre-market session on Wednesday.
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Move is part of News Corp’s Digital Real Estate Services segment. The media and information services company holds an 80% stake in Move, and REA Group owns the rest. A deal with CoStar would have significantly boosted News Corp’s cash position.
The deterioration in the macro environment has taken a toll on News Corp’s Digital Real Estate Services segment. The division’s revenue fell about 15% during the last reported quarter. Management blamed a weak housing market in the U.S. and macroeconomic pressure in Australia for this decline.
As the deal with CoStar fell apart, News Corp announced it would continue actively assessing opportunities to optimize the segment’s performance and maximize its shareholder value.
News Corp expects the Move business to remain challenged in the short term. Moreover, inflationary cost pressure and a challenging advertising market could continue to dent the overall revenues and earnings of the company.
Is News Corp a Buy?
News Corp stock has received two Buy recommendations on TipRanks. Together, these analysts’ average price target of $26 implies 42.39% upside potential.
Additionally, TipRanks data shows that hedge funds sold 2.2M shares of NWSA last quarter. Overall, it carries a Neutral Smart Score of five.
