BMO Takes Wait-And-See Approach With Fox TV

Fox Corp FOXA is a more focused entity since the TV news and sports company broke off from the former 21st Century Fox and has intriguing potential with its new streaming news service, according to BMO Capital Markets — but the firm is waiting for more clarity on the standalone company's financials.  

The Analyst

BMO’s Daniel Salmon re-initiated coverage of Fox Corporation with a Market Perform rating and lowered the price target from $49 to $37.

The Thesis

BMO likes the slimmed-down, more focused look of Fox, with its concentration on live sports and news channels, Salmon said in a Wednesday note. 

Fox’s effort to enter the direct-to-consumer streaming arena with the launch of the streaming service Fox Nation is a positive, the analyst said. 

“However, we believe shares are fairly priced at the moment … while we look for data points to support meaningful retransmission growth, capital return plans and further insights into the early traction of Fox Nation." 

The new Fox is made up of the main TV assets of the former 21st Century Fox company, including the FOX Broadcast Network, Fox News and other cable networks, including Fox Sports and the Big Ten Network.

Rights for broadcasting sports are a big part of Fox’s programming budget, and a key renewal to watch is the Sunday NFL package, Salmon said. 

“Beyond that, we think Fox could continue to tuck in smaller rights or expand current ones, but we don’t expect significant new ones." 

Price Action

Fox shares were down 1.43 percent at $36.78 at the time of publication Wednesday. 

Related Links:

Bank Of America Starts 'New Fox' With Buy Rating, Cites Proven Brand Track Record

Guggenheim Bullish On New Fox, Points To 'Industry-Leading Mix Of Live News And Sports Content Delivery'

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorPrice TargetReiterationAnalyst RatingsDaniel SalmonFoxFox Newsstreamingtv
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!