21st Century Fox (FOXA): Raising PT On Attractive Relative Valuation - Jefferies
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Jefferies analyst, John Janedis, reiterated his Buy rating on shares of 21st Century Fox (NASDAQ: FOXA) and raised his price target to $35 as he looks toward C2017 and thinks the stock could see renewed focus from investors given relative underperformance and appealing valuation.
After underperforming the broader market by ~600bps and peers like TWX, CBS, and SNI by ~2,500bps+ YTD, the analyst thinks FOXA's expected growth will be at the top end of peers in C17. Looking ahead, the analyst thinks FOXA's int'l cable assets will be one of the key value drivers for the company, contributing ~17% of segment EBITDA in C16, growing to 28% in C20 (including STAR).
The $35 PT is up from $32 based on a blended avg of 18.5x F2017E EPS and 9.7x EBITDA, which are both below historical averages. On an EV/EBITDA basis, the stock is trading below its historical average of 10.2x (a 24% discount) since the spin from NWSA. Similarly, on a P/E basis, the stock is trading at a 25% discount to its average of 19.6x.
Shares of 21st Century Fox closed at $27.80 yesterday.
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