Fox Corp's Political Ad Revenue Surges, Tubi Growth Sparks Analyst Optimism

Fox Corp FOXA warrants a Buy rating, according to Goldman Sachs analyst Michael Ng.

On Monday, Fox reported fiscal first-quarter 2025 revenues of $3.56 billion, up from $3.21 billion a year ago, beating the analyst consensus of $3.37 billion. 

Ng maintains a price target from $46 to $51.

Cable Network Programming reported quarterly segment revenues of $1.6 billion, up by 15%. Television reported quarterly segment revenues of $1.95 billion, up 10%.

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Ng observed that Fox Corp outperformed in the first quarter of fiscal 2025, reporting EBITDA of $1.05 billion, above the expected $874 million consensus. This was driven largely by stronger-than-anticipated results in both its Cable Network Programming segment, which posted an EBITDA of $748 million, and its Television segment, which delivered $372 million.

The analyst attributed the Cable Network's success to operating expense control and Fox News Media's ratings. At the same time, Television gained from higher-than-expected political ad revenues, notably in local stations and the streaming platform Tubi, which grew 19% year-over-year.

He raised Fox's 12-month price target to $51 from $46, reflecting expectations of record political ad revenue for fiscal 2025 as Tubi's ad performance strengthens.

Ng highlighted Tubi's targeted advertising appeal in the FAST (free ad-supported streaming) category. He expects the platform to benefit from continued political ad spending.

Fox Corp anticipates Tubi's revenue to exceed $1 billion in fiscal 2025. That projection aligns with market estimates, underscoring the platform's long-term growth potential as digital ad budgets shift.

Price Action: FOXA stock is up 1.73% at $43.75 at the last check on Tuesday.

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