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Needham & Company Downgrades 21st Century Fox (FOXA) to Hold

August 24, 2015 7:28 AM EDT
Get Alerts FOXA Hot Sheet
Price: $31.27 +0.32%

Rating Summary:
    21 Buy, 23 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Needham & Company downgraded 21st Century Fox (NASDAQ: FOXA) from Buy to Hold while lowering estimates.

Analyst Laura Martin commented, "We lower estimates and downgrade FOXA to Hold from Buy. We lower our FY16 estimates to revenue of $28.0B (from $28.3B), EBITDA of $6.5B (from $6.9B) and Adjusted EPS of $1.75 (from $1.84). Our new EBITDA estimate remains within FOXA guidance. We worry that international, retrans & reverse comp upside drivers are already discounted into the share price, but that the rising costs of original content coupled with the risk that ratings weakness is structural (given FOX’s younger demo target audience) are not. We raise our discount rate to account for growing risk to future FCFs. As an industry, we worry about valuation multiple contraction as content companies risk their 2-revenue stream bundle by moving content toward single revenue stream business models like Netflix, YouTube, CBS.com, etc."

For an analyst ratings summary and ratings history on 21st Century Fox click here. For more ratings news on 21st Century Fox click here.

Shares of 21st Century Fox closed at $27.94 yesterday.



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