Sports, News And Tubi: 3 Analysts Debate Fox Corporation's Q1 Revenue Beat

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Strong advertising revenue, sports coverage and the streaming platform Tubi were among the highlights from Fox Corporation’s first-quarter financial results for analysts.

The Fox Analysts: Morgan Stanley analyst Benjamin Swinburne has an Overweight rating on Fox Corporation FOX FOXA and $49 price target. 

Needham analyst Laura martin has a Hold rating and no price target.

KeyBanc analyst Brandon Nispel has a Sector Weight rating and no price target.

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The Fox Takeaways: Sports and news were big contributors to the advertising strength Fox saw in the first quarter, Swinburne said Thursday.

“Fox’s exposure to strong viewership in live sports and news content + Tubi led to healthy advertising growth in F1Q22 across both cable and TV,” the analyst said.

The advertising growth came against some tough comparables from the previous year, he said. 

“Fox’s sports portfolio, including the recent acquisition of UEFA European Championship rights and its dominant share of cable news ratings support healthy pricing power heading into these negotiations.”

Tubi was the key highlight from the first quarter for Martin.

“Tubi continues to exceed expectations, more than doubling y/y revs in 1Q22,” Martin said. “We estimate that Tubi will realize between $600 million and $700 million in FY22 and expect that FOXA will soon provide even more visibility on this asset.”

First-quarter revenue of $3.05 billion was up 12% year-over-year and 5% above Martin’s estimate.

Fox could be set up well for revenue growth in fiscal 2022, Nispel said.

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Revenue and earnings came in ahead of the analyst’s estimates.

The analyst has a neutral take on the company with shares trading at 8.6x fiscal 2023 EBITDA estimates, a premium to peers.

“FOXA has difficult comparison in FY22 from around $350 million in high margin political advertising in FY21,” Nispel said.

Nispel also points to Fox not having a true direct to consumer subscription service and increases expenses for Tubi.

FOXA Price Action: Class A Fox shares were down 0.6% at $41.33 at the close Thursday.

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Posted In: Analyst ColorPrice TargetReiterationAnalyst RatingsBenjamin SwinburneBrandon NispelKeyBancLaura Martinmedia stocksMorgan StanleyNeedhamstreaming stocksTubi
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