Guggenheim restarted coverage of the new Fox Corp. FOXA with a bullish stance on the TV network company’s prospects for growth as much as the rest of the television world fractures in the face of streaming.
The Analyst
Guggenheim’s Michael Morris resumed coverage of Fox with a Buy rating and a $45 price target.
The Thesis
The breaking up of the old Fox into more focused parts has put the streamlined company in a position for growth “via focus on live content that is less ‘disruptable’ by on-demand streaming platforms,” Morris said in a Sunday note.
Its focus on news and sports suit it well, because those are two areas where people are still turning to TV, while many entertainment viewers are being siphoned off to streaming, the analyst said.
While entertainment content has seen declines, Fox News viewership has remained consistently strong, Morris said.
“We believe the newly streamlined Fox is positioned to outperform peers in subscription revenue growth given its industry-leading mix of live news and sports content delivery."
While there may be some near-term volatility, Fox shares should maintain a valuation ahead of the company’s peers, according to Guggenheim.
Price Action
Fox shares were down 3.03 percent at $37.54 at the time of publication Monday.
Related Links:
Bank Of America Starts 'New Fox' With Buy Rating, Cites Proven Brand Track Record
New Fox Starts Trading, Adds Paul Ryan To Board; Disney Deal Effective Wednesday
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