Shares of Fox Corp. (FOX) are up 5% after several Wall Street analysts upgraded the stock. Both JPMorgan Chase (JPM) and Wells Fargo (WFC) lifted their ratings on FOX stock to the equivalent of a Buy. Both banks said they are bullish on Fox’s $22 billion acquisition of streaming company Roku (ROKU), which should be positive for Fox’s financial results.
In a note to clients, Wells Fargo called Roku a “growth/cash machine” for Fox. JPMorgan noted that Fox is coming off broadcasting the World Cup soccer tournament, which should boost the company’s financial results. JPMorgan raised its price target on FOX stock to $82 from $70, while Wells Fargo lifted its target to $80 from $65 previously.
The Roku Deal
Fox, the media company founded by Rupert Murdoch, agreed in June to buy streaming technology maker Roku for $160 a share or a total value of $22 billion. The deal is expected to close in the first half of 2027. Upon closing, Fox shareholders will own 73% of the combined company and Roku shareholders will own the other 27%.
Roku produces streaming devices and television sets that have its streaming technology embedded in them. The company also distributes streaming services and operates an advertising business. Currently, Roku is the U.S. market leader in streaming video distribution, reaching nearly half of U.S. households.
Roku originated as an in-house project at Netflix (NFLX) and was later spun-off as an independent company. JPMorgan and Wells Fargo say the deal gives the cable TV-reliant Fox access to Roku’s installed base of more than 100 million streaming households, helping it sell ads and reduce reliance on its traditional TV networks.
FOX Stock’s Performance
Let’s look at the performance of Fox stock. As the chart below shows, shares of the broadcast media company have gained 8% in the last 12 months.
