BofA Is 'Holding The Line' At 21st Century Fox

In a report published Thursday, BofA Merrill Lynch analysts maintained a Buy rating on Twenty-First Century Fox, Inc FOXA, with a price objective of $39.

The analysts expect the company to generate "flattish" revenue growth in F3QE. There could be a "mid-single digit decline in OIBDA. Some of the healthy gains at Film and Cable Networks may be offset by continued "ratings headwinds" at Television and an increase in expenses at Cable Networks.

In the report BofA Merrill Lynch noted the key drivers as:

1. favorable theatrical comps at the Studio (Kingsman: The Secret Service, Taken 3 and Night at the Museum: Secret of the Tomb vs. last year’s Son of God)
2. favorable home entertainment comps at the Studio (Night at the Museum: Secret of the Tomb, Exodus: Gods and Kings and Gone Girl vs. last year’s 12 Years a Slave and The Book Thief)
3. low-mid-single-digit Cable Networks contribution
4. soft Television

The analysts also expect Twenty-First Century Fox to repurchase $1.6bn worth of shares during the quarter.

The EPS estimates for F3Q and FY15 have been raised from $0.42 to $0.41 (to reflect BSkyB softness) and from $1.72 to $1.71 (on flow through), respectively.