On Thursday, Citi made an adjustment to FOX Corp's (NASDAQ:FOXA) financial outlook, increasing the price target to $40 from the previous $38, while keeping a Buy rating on the shares. The firm updated its model to reflect slight revisions to its forecasts ahead of the fourth fiscal quarter of 2024 results.
The adjustments by Citi include a scaled-back projection for TV advertising revenue for the quarter and a reduced assumption for interest expenses in the future. These changes have led to a marginal increase in the revenue and EBITDA predictions for the years 2024 to 2026.
Citi's analyst cited the modifications to the model as the reason for the uplifted price target, stating, "Following our update, our price target moves to $40 from $38." The firm confirmed its positive stance on FOX Corp by reiterating its Buy rating.
FOX Corp's financial performance and outlook are closely monitored by investors, as changes in analyst estimates can influence market perceptions and stock performance. The updated price target and maintained Buy rating suggest a continued optimistic view of the company's potential for growth and profitability.
Investors and market watchers will be keeping an eye on FOX Corp's upcoming fourth fiscal quarter results to see if the company's performance aligns with Citi's moderated expectations. The anticipation of these results may play a role in the stock's movement in the near term.
In other recent news, FOX Corporation has been a subject of interest for several financial firms. UBS maintained its Buy rating on the company, anticipating consistent trends and expecting growth into fiscal year 2025, with a price target of $44. The firm projects a total affiliate growth of 4.6% year-over-year in the fourth fiscal quarter and an EBITDA of $702 million. In fiscal year 2025, UBS expects the EBITDA to reach $3.2 billion, surpassing the street's estimate of $3.05 billion.
Similarly, Goldman Sachs initiated coverage on FOX Corp, assigning a Buy rating and setting a price target of $42. The firm foresees a boost from the upcoming 2024 political season, projecting an additional $280 million in political advertising spend. Furthermore, the firm believes the market has not fully recognized the value of FOX Corp.'s unconsolidated net assets, estimated to be worth $5.5 billion.
In recent financial results, FOX Corp reported a net income of $666 million and total revenue of $3.45 billion. Despite a decline in ad revenue, the company managed to surpass Wall Street's profit forecasts. Deutsche Bank, Rosenblatt, and CFRA all raised their price targets for the media giant, reflecting the company's robust EBITDA increase, controlled expenses, and slight uptick in affiliate revenue across both Cable and TV segments.
In other company developments, FOX Corp announced a sports-streaming joint venture with The Walt Disney Company (NYSE:DIS) and Warner Bros Discovery (NASDAQ:WBD), aiming to provide streaming services for major sports leagues and events.
InvestingPro Insights
Citi's recent price target increase for FOX Corp (NASDAQ:FOXA) aligns with several positive indicators highlighted by InvestingPro. With the company actively engaging in share buybacks and exhibiting a high shareholder yield, investors may find additional confidence in FOX Corp's financial strategies. Moreover, the firm's consistent dividend growth over the last three years and a low P/E ratio compared to near-term earnings growth are noteworthy. FOX Corp is also trading at a level close to its 52-week high, which could signal market confidence in the stock.
From a financial perspective, FOX Corp's market cap stands at a robust $15.92B, with an attractive P/E ratio of 9.99, reflecting investor sentiment on its earnings potential. Additionally, the PEG ratio of 0.21 suggests that the stock may be undervalued based on expected growth rates, offering a potentially lucrative opportunity for investors seeking growth at a reasonable price. The InvestingPro platform further lists the company as profitable over the last twelve months, reinforcing the positive outlook shared by Citi.
To delve deeper into FOX Corp's financial health and future prospects, consider exploring more InvestingPro Tips at https://www.investing.com/pro/FOXA. There are 9 additional tips available that could provide further insights into your investment decisions. To enhance your experience, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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