Why fund managers say News Corporation's Dow Jones is undervalued
News Corporation's Dow Jones division has quietly become as profitable as its REA Group stake, but the stock keeps getting swept into broader AI disruption sell-offs.
10 Jun 2026 · 6 min read
In short
News Corporation's Dow Jones division, home to the Wall Street Journal, now contributes roughly equal profit to the company compared with its 61% REA Group stake.
The Wall Street Journal and Barron's generate 84% of sales through digital channels, according to Perpetual Asset Management.
News Corporation's share price has repeatedly fallen on broad AI disruption fears despite the company carrying no debt and beating earnings expectations.
Global media group News Corporation has traded closely correlated to its roughly 61% stake in REA Group, with Blackwattle Investment Partners' October 2025 Monthly Report noting the stock's 10.9% monthly decline outpaced REA's own 7.8% fall, suggesting some additional caution had crept in around News Corp's other businesses, including Dow Jones and Harper Collins, even amid otherwise solid operating momentum.
Dow Jones is the hidden jewel investors keep discovering
Oracle Advisory Group's September 2025 Quarterly Report argued the market has been ignoring the undervaluation of Dow Jones, 100% owned by News Corp and home to the Wall Street Journal and B2B financial data businesses, noting the division increased profits 10% in the fourth quarter of FY25 and now contributes roughly equal profit to News Corp compared with REA. Perpetual Asset Management's October 2025 Monthly Report added that the Wall Street Journal and Barron's now generate 84% of sales through digital channels, with News Corp's digital expansion continuing to drive its core profit engines.
Post the sale of Foxtel, NWS provides exposure to three high-quality, growing assets at a very attractive valuation. The net cash balance sheet supports ongoing buy backs which are highly value accretive to shareholders at current levels.
— Perpetual Asset Management, Monthly Report, October 2025
The stock has repeatedly been swept into what Airlie Funds Management's March 2026 Monthly Report called the AI loser bucket alongside REA and Dow Jones, despite News Corp carrying no debt and growing earnings 10% in the second quarter of FY26, beating expectations by 8%, and increasing its buyback; the share price still fell 14% in February 2026 on the broad AI-linked sell-off before rebounding 10% in March as Airlie added to its position on the weakness. Yarra Capital Management's March 2026 Quarterly Report detailed initiating a position after a 20% sell-off, arguing Dow Jones, as a content creator, has on balance more opportunities than threats from AI, with REA Group's own disruption risk similarly overstated.
What managers are watching next
Not every manager stayed the course. Oracle Advisory Group exited its position in December 2025 after more than doubling its original holding, concerned REA Group could face business pressure from Domain following its takeover by US real estate giant CoStar, alongside share price risk from REA's elevated trading multiple. With Perpetual Asset Management arguing the current valuation implies a material discount to the market value of the REA stake alone, meaning Dow Jones and Harper Collins are effectively being valued for little, the ongoing AI-related de-rating of both REA and Dow Jones remains the key swing factor managers are watching.
Questions
How correlated is News Corporation's share price to REA Group?
News Corporation owns around 61% of REA Group, and Blackwattle Investment Partners notes the two share prices are highly correlated, though News Corp's other assets including Dow Jones and Harper Collins also drive independent share price movements.
Why do fund managers say Dow Jones is undervalued within News Corporation?
Oracle Advisory Group argues the market ignores Dow Jones' value, noting the division increased profits 10% in a recent quarter and now contributes roughly equal profit to News Corporation compared with its REA Group stake, yet the market cap implies limited value for it.
Why has News Corporation's share price fallen despite strong results?
News Corporation has repeatedly been grouped into the market's broader AI disruption sell-off alongside REA Group and Dow Jones, with Airlie Funds Management noting the stock fell 14% in February 2026 even after beating earnings expectations by 8% and increasing its buyback.
9 managers, 28 comments, with each manager's latest recorded position.
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