Guggenheim sees upside potential for Fox stock from demand for live sports and news By Investing.com

On Tuesday, Guggenheim reiterated its buy rating on FOX Corporation (NASDAQ:FOXA) stock and raised its price target from $44 to $45. The investment bank cited FOX’s strong programming, including regular NFL games, an expanded college football offering and Fox News broadcasts, as key factors in viewer growth.

The Guggenheim analyst updated his model for FOX and expressed optimism about the continued demand for live news and sports content, which are expected to drive advertising and viewership in the second and third fiscal quarters. Due to this positive outlook, the forecast EBITDA for the full year 2025 was raised slightly to $3.12 billion, up from the official estimate of $3.09 billion.

FOX’s total advertising revenue is expected to improve sequentially, with a 7.8% increase in the first fiscal quarter of 2025 compared to a flat fourth fiscal quarter. This growth is attributed to several factors, including the performance of Tubi, solid demand for political advertising, live sports and rising Fox News ratings. However, some dampening is expected due to programming interruptions.

Affiliate fee growth is forecast to increase 3.9% for the first fiscal quarter, despite an expected 8-9% subscriber windfall. The estimate for total company EBITDA in the first fiscal quarter remains stable at $904 million.

The revised 12-month price target of $45 reflects a one-dollar increase and underscores Guggenheim’s confidence in FOX Corporation’s stock performance for the coming year.

In other recent developments, Goldman Sachs reiterated its Conviction Buy rating on FOX Corp shares with a stable price target of $46.00. The bank expects FOX to generate earnings of about $874 million in the first quarter of fiscal 2025, with modest increases in both fees and advertising revenue in the Cable Networks division, mainly due to the strong performance of the Fox News Channel.

Rupert Murdoch recently concluded a key hearing in Nevada where he sought changes to the family trust aimed at ensuring that control of his media companies, including FOX Corp, remains with his eldest son, Lachlan Murdoch, after his death. This development has become a key point of discussion regarding succession plans.

In the area of ​​investor relations, Seaport Global Securities has upgraded its rating of Fox Corp (NASDAQ:) downgraded to Neutral from Buy, reflecting the current valuation of Fox Corp shares. Despite the potential benefit from political advertising spending, Seaport’s rating change suggests limited upside potential in the near term.

These recent developments underscore the dynamic nature of FOX Corp’s business and strategies and highlight the potential for Fox News Channel and local TV stations to benefit from increased advertising revenues resulting from election coverage.

InvestingPro Insights

In addition to Guggenheim’s bullish outlook for FOX Corporation (NASDAQ:FOXA), InvestingPro data and tips provide investors with other key insights. According to InvestingPro, FOX Corporation has been actively repurchasing its own shares, signaling management’s confidence in the company’s value. In addition, FOXA has consistently increased its dividend over the past four years, a trend that underscores the company’s commitment to creating value for shareholders. These InvestingPro tips are particularly relevant because they highlight the company’s shareholder-friendly policies and financial stability.

Turning to the financial metrics, FOX Corporation has a market capitalization of $18.14 billion, with a trailing twelve-month price-to-earnings (P/E) ratio of 11.65. This relatively low P/E ratio, combined with the expected near-term earnings growth, suggested that the stock may be undervalued compared to its earnings potential. Also notable is that the company’s stock is trading near its 52-week high and has a strong total return of 20.09% over the past three months. These numbers are testament to the company’s robust performance and market confidence.

Investors looking for additional insights can find InvestingPro tips for FOX Corporation at where a wealth of data is available to help you make informed investment decisions.

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