Fox Will See Big Win from New Sports Joint Venture: Analyst
Portfolio Pulse from Anusuya Lahiri
Citigroup analyst Jason Bazinet upgraded Fox Corp (NASDAQ:FOXA) from Neutral to Buy, raising the price target from $34 to $35, following the announcement of a sports joint venture with Walt Disney Co (NYSE:DIS) and Warner Bros Discovery, Inc (NASDAQ:WBD). The JV, which encompasses ~50% of US sports rights, is expected to positively impact Fox's revenue and EBITDA for fiscal years 2025 and 2026. The Justice Department is reviewing the JV due to potential consumer and market concerns. Fox's Q2 2023 revenues were $4.23 billion, with an adjusted EPS of $0.34, beating consensus.
February 23, 2024 | 7:42 pm
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POSITIVE IMPACT
Walt Disney Co's involvement in the sports JV with FOXA and WBD may have a neutral to positive impact on its stock, depending on the outcome of the DOJ review.
While the JV is expected to be positive for Fox, the impact on Disney's stock is less direct and may hinge on the DOJ's review. However, Disney's vast portfolio and involvement in a venture controlling a significant portion of US sports rights could be seen as a strategic advantage.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Fox Corp's upgrade by Citigroup and the positive outlook on the new sports JV with DIS and WBD are likely to positively impact its stock price in the short term.
The upgrade by Citigroup, coupled with the anticipated positive impact of the sports JV on Fox's financials, suggests a bullish outlook for FOXA's stock. The analyst's raised price target reflects expectations of improved performance, making it an attractive prospect for investors.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Warner Bros Discovery's participation in the sports JV alongside FOXA and DIS could positively influence its stock, subject to regulatory review outcomes.
Warner Bros Discovery's role in the JV may positively impact its stock, similar to Disney, depending on the DOJ's review. The venture's control over a large share of US sports rights presents a strategic growth opportunity for WBD.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70