Fox, the Communication Services sector company, was revisited by a Wall Street analyst yesterday. Analyst John Hodulik from UBS maintained a Buy rating on the stock and has a $65.00 price target.
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John Hodulik’s rating is based on several key factors that suggest a positive outlook for Fox’s stock. Despite challenging comparisons in ratings, particularly at FOX News, the company is expected to demonstrate resilience in advertising performance, with affiliate growth remaining healthy. Hodulik has updated the first-quarter estimates to reflect better-than-expected TV ratings and advertising revenue, although higher investments are anticipated. While a decline in total company advertising is expected, it is projected to be less severe than previously thought, and affiliate growth is anticipated to continue, albeit at a moderated pace.
Looking ahead, Hodulik expects a return to EBITDA growth next calendar year, driven by cyclical tailwinds such as the World Cup and mid-term elections, alongside the moderation of upfront investments in FOX One. The underlying drivers, including a strong cable news advertising pricing environment and a ramping renewal schedule, remain intact. Additionally, the company is positioned to benefit from new sports and news tiers, which could provide further growth opportunities. These factors collectively contribute to the Buy rating for Fox’s stock.