UPDATE: Credit Suisse Downgrades FOX Corp. (FOXA) to Neutral

Credit Suisse analyst Douglas Mitchelson downgraded FOX Corp. (NASDAQ: FOXA) from Outperform to Neutral with a price target of $36.00 (from $41.00).

The analyst comments "This year’s Fox relative outperformance vs. Media/S&P 500 was driven by: (a) operational and financial simplicity and transparency; (b) confidence in near- to mid-term growth given pricing power as a pure-play TV sports & news operator and FY23 growth drivers (political; Super Bowl; ~$375m TNF losses ending); (c) high FCF conversion with minimal streaming investments; and (d) U.S.-only operations. Yet Fox is increasingly facing: (a) a shift to unfavorable FY24 drivers that do not appear fully factored into consensus (political/Super Bowl comps and 1st year Sunday NFL step-up); (b) growing CY23 advertising recession risk (against Fox’s annual $6B of advertising); and (c) increasing secular concerns, including cord cutting accelerating (and 2023 perhaps worse with Sunday Ticket moving to a streamer and a potential consumer recession). Thus, the near-to-midterm investment case increasingly relied on favorable allocation of its $5B of cash (vs. its $17B market cap). Fox Corp’s Friday announcement that Rupert Murdoch has decided to finally pursue a “combination” of Fox and News Corp undercuts this remaining investment pillar; we downgrade to Neutral."

For an analyst ratings summary and ratings history on FOX Corp. click here. For more ratings news on FOX Corp. click here.

Shares of FOX Corp. closed at $31.55 yesterday.

You May Also Be Interested In

• RBC Capital Downgrades Downer EDI Ltd (DOW:AU) (DNERF) to Sector Perform
• JPMorgan Downgrades Pop Mart International Group Ltd (9992:HK) to Underweight
• Jefferies Downgrades Pop Mart International Group Ltd (9992:HK) to Hold