Wells Fargo Double Upgrades FOX Corp. (FOXA) to Overweight

Wells Fargo analyst Steven Cahall upgraded FOX Corp. (NASDAQ: FOXA) from Underweight to Overweight with a price target of $46.00 (from $29.00).

The analyst comments "Sports streaming - more opp'ty than risk. We've published a separate deep dive on Venu. We're bullish on its potential, and see FOXA as the biggest beneficiary at +HSD/LDD% accretion to our new EBITDA ests. We've prev. worried about accel'd cord cutting and the decline of high-margin Fox News, but we now think Venu can more than offset risk to News on higher sports ARPU. Looking further out, we think FOXA could roll its sports into ESPN Flagship DTC as the sports streaming journey continues. We value WBD and PARA at 5.5-6x EV/EBITDA. However, those peers have more leverage and far more consolidated earnings pressure. As we're more constructive on FOXA's EBITDA outlook and sports streaming transition, we increase our target from blended 5.5x to 7x FY25E EV/EBITDA. We also incl. a $800mm drag for litigation, $2.5bn for the tax shield NPV and $1.2bn for sports betting + the LA lot. Our target moves from $29 to $46."

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 $38.99 yesterday.

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