New York Times Gains on Stock Upgrade, Digital Progress

New York Times Co., the newspaper publishing company, rose the most in two months after Barclays Plc upgraded the stock, citing increasing revenue from its digital paywall and a better cash position.

Times Co. advanced 3.7 percent to $10.35 at the close in New York for the biggest jump since Aug. 8. The shares have gained 34 percent this year.

The company is working to increase its digital expertise and has accelerated a shift to the Internet as print advertising declines. In the second quarter, digital subscriptions for the New York Times and International Herald Tribune rose 12 percent from the prior period. In August, Times Co. named former British Broadcasting Corp. director Mark Thompson as chief executive officer to help lead the electronic push.

“The increase in circulation revenues from the company’s digital paywall is now meaningful enough to offset the decline in print advertising,” Kannan Venkateshwar, a New York-based analyst for Barclays, wrote in a note today, where he upgraded the shares to the equivalent of buy, from equalweight, or neutral. “It is also adding to its Sunday home delivery subscriber base now after many years of decline.”

There’s also “increased likelihood of cash return to equity holders, ” since Times Co. is sitting on “pro forma cash of $935 million” after generating $650 million from the sale of non-core assets, he wrote.

Times Co. introduced the digital paywall in March 2011.

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