UPDATE: Macquarie Upgrades News Corp

News Corp NWSA was upgraded from Underperform to Neutral with a $16.70 price target by Macquarie in a report issued Monday.

Analysts led by Tim Nollen noted that on November 3 "FOXTEL goes live with the biggest pricing revamp in its history, as it tries to reinvigorate subscriber growth and defend its turf against new competitors. The most significant element is the effective halving of entry level pricing from A$49/month to A$25/month."

"The ability to "trade down" [to lower priced subscriptions] exists because FOXTEL has unbundled/dis-aggregated more of its content in an effort to reduce the entry level price. To minimise "trading down", FOXTEL is offering increased content inclusions to those who maintain their existing spend, and will likely implement other offers – such as upgrades to its new iQ3 box," according to Nollen.

The report concluded that "while subscriber growth will pick up, it will be at a much lower margin than any revenue lost from ‘trading down’. We have pulled back FOXTEL forecasts."

Nollen commented that "while the outlook remains challenging for News Corp on many fronts, operational trends should improve in CY2015 as the company begins to cycle some softer comps."

News Corp recently traded at $14.82, up 0.75 percent.