Morgan Stanley raises Fox outlook after strong fourth quarter

Investing.com -- Fox Corporation ended its fiscal 2026 with fourth-quarter revenue of $4.2 billion and record earnings before interest, taxes, depreciation and amortization of $1.2 billion, according to Morgan Stanley.

The FIFA World Cup generated profits and boosted advertising revenue across the company's platforms, including Tubi and Fox One. The sporting event also helped Fox One gain new subscribers and improve customer retention rates.

Tubi's revenue grew 35% year-over-year in the quarter, exceeding Morgan Stanley's estimate of 18% growth. The streaming platform saw total viewing time increase 17%, marking its most-streamed and highest-revenue quarter to date.

Fox reduced its digital investment losses to less than $200 million in fiscal 2026, down from approximately $300 million in fiscal 2025. The company expects further improvement in fiscal 2027.

The company plans to close its Roku deal in the first half of calendar year 2027. Fox will continue share buybacks and has increased its dividend.

Political advertising sales are tracking ahead of what Morgan Stanley expects to be a record mid-term election cycle. The firm estimates $280 million in political ad revenue, compared to $260 million during the 2022 mid-terms and over $400 million in the 2024 presidential election cycle.

Fox postponed concerns about NFL contract step-up costs, stating it plans to discuss the opt-out seasons and future arrangements with the league closer to the 2030 season following recent talks.

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