Investing.com -- Bank of America upgraded Fox Corporation to Buy from Underperform, arguing in a note Friday that the pending acquisition of Roku has shifted the stock’s risk/reward.

Analyst Jessica Reif Ehrlich raised the price target to $85 from $54, which reflects about 10 times BofA’s updated 2028 pro forma EV/EBITDA estimate. The stock last closed at $62.21.

The deal is expected to close in early 2027, and BofA said pro forma financials are now a more appropriate valuation barometer. The bank noted that both companies enter the transaction with operating momentum.

“In addition, Fox has historically been a superb operator giving us confidence in a smooth integration,” Reif Ehrlich wrote.

The prior Underperform rating is said to have reflected the risk of an early NFL renewal and concerns about Fox’s long-term positioning as media shifts toward streaming. With the near-term NFL renewal risk largely receding until the 2029 opt-out window, BofA said the Roku deal fundamentally changes the narrative.

“By adding a scaled OS and distribution platform, Roku provides Fox with a credible path to transition its predominantly linear portfolio toward DTC, addressing the company’s most significant weakness,” the analyst said.

BofA views the $400 million cost synergy target, about 10% of the combined SG&A and corporate cost base, as highly achievable. It projects base-case revenue synergies of about $530 million, with a bull case of $1.07 billion. Together, these imply roughly $700 million in total 2028 EBITDA uplift.

“Importantly, our base case does not contemplate all revenue opportunities, creating significant upside over time,” Reif Ehrlich added.

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