Shares of New York Times down 5.3% after Barclays downgrade

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Shares of New York Times down 5.3% after Barclays downgrade

Shares of the New York Times Company

NYT, -5.04%

fell 5.3% on Tuesday after Barclays downgraded the media company to underweight from neutral, saying investors are putting too much weight on digital net additions. “Investors appear to have transitioned to a valuation framework based on digital net adds rather than earnings. We believe this valuation transition is too premature and could force suboptimal choices on management,” wrote Barclays analysts, led by Kannan Venkateshwar. Venkateshwar also cut his price target for the Times to $18 from $20, a 32% downside from the current share price of $26.46. He compared the Times’s digital growth to that of Spotify

SPOT, -1.66%

saying: “Based on certain assumptions for print, we believe the digital business at present is being valued higher than Spotify despite digital revenue growth being a fraction of Spotify. Therefore, as much as we like the digital story and believe it is likely to continue scaling over the coming years, we believe the momentum in this stock has taken valuation to levels that will need a very different trend line for growth relative to the one the company is on.” Shares of the Times have gained 43% in the year to date, while the S&P 500

SPX, +0.11%

has gained 2.8%.

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