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Facebook (FB) Instant Articles Positive for The New York Times (NYT) - FBR Capital

May 13, 2015 3:04 PM EDT
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Price: $43.27 -0.78%

Rating Summary:
    5 Buy, 8 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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FBR Capital analyst William Bird weighed in on The New York Times (NYSE: NYT) amid news Facebook (NASDAQ: FB) began hosting instant articles provided by nine media companies, including The New York Times. The firm views this as a near-term positive for the company, although not enough to upgrade the stock.

"We view this as a positive near-term development for NYT," Bird said. "Longer-term it remains to be seen how the commercial terms may evolve. We maintain our MP rating on NYT as we do not believe the shares are mispriced."

He added, "FB’s instant articles gives NYT the ability to harness FB’s massive reach (i.e., 798M daily active mobile users) and an interesting potential new outlet to syndicate video. We believe the new arrangement has the potential to increment NYT’s ad revenues in the tens of millions of dollars. Currently, NYT generates 14-16% of its web traffic from FB. In terms of digital subscription impact, we see limited impact on its paying digital subscribers because the number of articles distributed will be modest, and currently referrals from search and social don’t count toward the ten article paywall limit. NYT’s increased exposure could be good for product sampling and subscription marketing. The longer-term impact on NYT is less clear as the commercial arrangement could change, a dynamic that some would argue is standard operating procedure at FB. "

For an analyst ratings summary and ratings history on New York Times click here. For more ratings news on New York Times click here.

Shares of New York Times closed at $13.87 yesterday.



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