Media company Fox Corporation FOX FOXA could benefit from its focus on sports and politics, with the Super Bowl LIX broadcast and 2024 election acting as major catalysts.
The Fox Analyst: Bank of America analyst Jessica Reif Ehrlich reiterated a Buy rating on Fox and raised the price target from $45 to $50.
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The Analyst Takeaways: Sports, news, and politics are likely to help Fox in the first fiscal quarter and future quarters, Ehrlich said in an investor note Wednesday.
"Fox's portfolio of sports and news has positioned the company well to weather secular headwinds in linear relative to peers," Ehrlich said.
The analyst said the 2024 election is helping Fox see strong growth in advertising and viewership trends.
"Political should pick up in F2Q. Last presidential cycle, Fox local TV stations did $230mn in political advertising and are on track to exceed this '24."
Fox will also air Super Bowl LIX on Feb. 9 in the third quarter, the analyst added.
"Indications are that Super Bowl demand is extremely strong and inventory is almost sold out."
As a reminder, Fox is seeking $7 million for each 30-second advertisement during Super Bowl LIX.
NFL viewership through the first two weeks of the 2024 season averages 19.7 viewers, up 12% year-over-year. Fox had the third most-watched NFL game during the first two weeks, with Week 1's matchup between the Dallas Cowboys and Cleveland Browns watched by an average of 23.9 million viewers.
The analyst said Fox has the lowest exposure to entertainment advertising, with a strong presence across sports and news.
The analyst said linear trends continuing to weaken could cause Fox to migrate content to streaming. With a joint venture facing litigation, Fox could have to consider other options, including a standalone direct-to-consumer product for sports and news.
FOX Price Action: Fox stock trades at $38.44 versus a 52-week trading range of $25.82 to $39.00. Fox stock is up 36.5% year-to-date in 2024.
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