Pali Research analyst Rich Greenfield has strong opinions and today it was News Corp.’s turn. Greenfield lowered his earnings estimates for the fifth time in five months and downgraded the company to sell from buy. His reasons include the usual — decreased earnings per share estimates for fiscal years 2009 and 2010; the possibility that COO Peter Chernin may not renew his contract, which expires midyear, more likely to Greenfield the longer it takes; hesitancy over stock buybacks. But his concerns also go to the heart of the company: Rupert Murdoch, chairman and CEO, who Greenfield now sees as a visionary without a strategy for many of News Corp.’s core businesses.
From his note to clients: “While we have long viewed Rupert Murdoch as the most visionary CEO in the media sector and one of the only CEOs willing to make long-term strategic investments (regardless of the near-term earnings impact or public investor views), we are increasing surprised/frustrated with his lack of strategic direction related to News Corp