TLDR
- J.P. Morgan and Wells Fargo both upgraded Fox Corp to Overweight, raising price targets to $82 and $80 respectively
- Fox Q4 television revenue rose 45% year over year to $2.48 billion, with EBITDA jumping 129% to $705 million
- Tubi hit 110 million monthly active users, with revenue up 35% and viewing time up 17%
- The pending Roku acquisition would create the largest free ad-supported streaming TV operator
- Wells Fargo estimates the Roku deal could generate $300 million in advertising revenue synergies within two years
Fox Corp received back-to-back upgrades from two major Wall Street banks on Friday, sending the stock up roughly 4% to around $65.45.
J.P. Morgan lifted its price target to $82 from $70, while Wells Fargo raised its target to $80 from $65. Both firms moved Fox to Overweight from Neutral.
J.P. Morgan boosted its fiscal 2027 and 2028 adjusted EBITDA estimates by 7% and 9% following Fox’s fourth-quarter results. The bank pointed to strong FIFA World Cup economics, a solid political advertising outlook, and continued advertising momentum as key drivers.
Fox’s Q4 television revenue climbed 45% year over year to $2.48 billion. Segment EBITDA surged 129% to $705 million.
Tubi also had a strong quarter. Revenue rose 35%, helped by a 17% increase in viewing time. The platform ended fiscal 2026 with 110 million monthly active users.
World Cup and Political Ads Fuel Outlook
J.P. Morgan raised its fiscal 2027 television EBITDA estimate by 30% to $1.49 billion. The bank flagged the upcoming 2026 FIFA World Cup and what it expects to be a record political advertising cycle as the main catalysts.
Fox also confirmed it will not enter early negotiations to renegotiate its NFL media rights deal. J.P. Morgan said this removes a major near-term overhang and validates the company’s negotiating position.
Wells Fargo lifted its fiscal 2027 EBITDA estimate to $4.12 billion from $3.85 billion. It now expects World Cup revenue of around $800 million, up from a prior estimate of more than $600 million. Its fiscal 2027 television segment EBITDA estimate rose to $1.6 billion from $1.3 billion.
Roku Deal Adds to the Bull Case
The planned Roku acquisition is a big part of the upgraded outlook. Combining Tubi with The Roku Channel would create the largest free ad-supported streaming TV operator in the market.
J.P. Morgan said the deal improves Fox’s growth profile and reduces concerns about long-term valuation. Roku currently has more than 100 million streaming households, giving Fox a larger base to sell advertising across.
Wells Fargo estimates the deal could generate around $300 million in advertising revenue synergies within about two years. Those gains would come from better pricing, higher fill rates on Roku Channel inventory, homescreen advertising, and improved monetization of third-party streaming content.
J.P. Morgan noted Fox is currently trading at 6.8 times enterprise value to EBITDA on its raised fiscal 2028 estimate, below the recent level of roughly 8 times. It sees room for a rerating as investors begin to view the combined company as a scaled connected-TV platform.
Five analysts have revised their earnings estimates upward for the upcoming period, according to InvestingPro data.
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