Nine Entertainment's (ASX:NEC) publishing division has stabilised, with revenue decline slowing and assets like the Australian Financial Review (AFR) appearing undervalued, according to a Wednesday Jefferies note.

The investment firm believes that the paper may not reach the enterprise value to earnings before interest, tax, depreciation, and amortisation (EV/EBITDA) multiples of 16 to 17 times seen for global peers such as Dow Jones or The New York Times, but it deserves a higher valuation than the about eight times multiple paid by RedBird Capital for The Telegraph in the UK.

Jefferies added that if a 10 times EV to EBITDA multiple were applied to the AFR, it would imply a valuation of around AU$400 million, representing an 11% upside to Jefferies' current sum-of-the-parts valuation for Nine Entertainment's Publishing division.

Jefferies kept a buy rating on NEC with a price target of AU$1.40.