Buy New York Times on subscriber success, AI licensing, Deutsche Bank says

The New York Times stands out in the media landscape because of its thriving subscription business as well as opportunities stemming from artificial intelligence applications, according to Deutsche Bank. Analysts led by Benjamin Soff initiated research coverage of the 173-year-old newspaper’s stock with a buy rating and a $65 price target. Soff’s target Is Wall Street high, according to FactSet data, and suggests the potential for shares to add about 19% from Tuesday’s closing level. “In our view The New York Times’ news publishing is differentiated in today’s media landscape,” Soff wrote in a Wednesday note announcing the call. “At a time when many publications are shrinking, and user engagement has shifted towards social media and video formats, The New York Times has continued to invest [in] its journalism platform.” Soff highlighted the Times’ digital-first subscription model, saying the publisher should be able to reach its goal of 15 million total subscribers by 2027, expanding the user base by about 10% annually. Beyond investments in the newsroom, Soff said the audience growth is driven by an emphasis on new journalistic formats such as podcasts and video presentations, and expanded cooking and game offerings. The Times now offers investors strong fundamentals, ranging from “healthy engagement trends” among users to an expanding total addressable market, pricing power and advertising growth. NYT YTD mountain NYT shares, year to date Moreover, Soff said the Times can see additional upside tied to AI licensing agreements, noting the company is building out its own internal AI capabilities. This AI work can allow the NYT to post double-digit growth in adjusted operating profit and return more capital to shareholders, Soff said. The Times is well positioned to capitalize on the generative AI market, by “leveraging its vast content archive and differentiated journalistic capabilities, both internally and potentially with external partnerships,” the analyst wrote. Times shares have added nearly 12% in 2024, building on last year’s 50% advance.