Shares of New York Times (NYT) were on the rise after JPMorgan analyst Alexia Quadrani raised her price target on the stock to $32, citing ongoing digital subscriber growth as the “Trump bump continues.” Since taking office, President Donald Trump has been very critical of the New York Times and many of its media peers, frequently using the term “fake news” to deride their reporting.

Digital subscriber growth

In a research note to investors this morning, JPMorgan’s Quadrani raised her price target for New York Times to $32 from $27 and reiterated an Overweight rating on the shares ahead of the company’s third quarter results. The analyst argued that while quarterly subscriber growth may continue to be volatile, influenced by the timing of marketing campaigns and uneven news cycles, she believes the longer-term trends are positive and expects growth to remain at elevated levels for the foreseeable future.

Looking at results for the second half of the year, Quadrani projects a ramp in digital subscriber growth in part driven by the Kavanaugh hearings, Trump tax stories, and midterm elections. Additionally, the analyst noted that she believes churn remains relatively low. As attention moves further onto 2019, the financial benefits of the building repurchase will become more of a focus, creating another possible catalyst for the shares. The stock has always been a challenge to value given a historic warranted premium to other newspaper stocks due to its national presence and brand value, she acknowledged, adding that newspaper peers are even less relevant now as 36% of The New York Times revenues and all of its growth comes from an unmatched digital business. She looks for the multiple to further migrate to more similar digital comps over time.

‘Failing’ New York Times 

Earlier this month, President Trump criticized a New York Times investigation into his and his family’s use of “dubious tax schemes” over the years and the origins of his own wealth, calling the article an “old, boring and often told hit piece.” In a tweet, the President said “The Failing New York Times did something I have never seen done before. They used the concept of “time value of money” in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!”