5 Huge Analyst Calls: Fox Corp. slashed on plummeting viewership; Meta bumped up
investing.comHere is your Pro Recap of the top takeaways from Wall Street analysts for the past week: upgrades for Meta and Morgan Stanley, and downgrades for Fox Corp., JetBlue, and Progressive
InvestingPro subscribers always get news like this first. Never miss another market-moving upgrade.
What happened? On Monday, Wells Fargo downgraded Fox Corp Class A (NASDAQ:FOXA) (NASDAQ:FOX) to Underweight with a $31 price target.
What’s the full story? Wells Fargo sees multiple headwinds facing Fox Corp, citing the challenges of cable news, cord cutting and sports-rights costs as reasons to avoid the stock. They argue that cable news is losing viewers as more people cut the cord, and that Fox News has suffered a significant drop in market share after the departure of its star host Tucker Carlson.
They also note that Fox News accounts for 80% of Fox Corp’s earnings before interest, taxes, depreciation and amortization (EBITDA), and that investors will need to see evidence of a turnaround. Wells moreover warns that cord-cutting could accelerate if ESPN goes direct-to-consumer, and that sports-rights costs will rise in 2024 due to new deals with the NFL and the Big Ten.
Wells says there are better value opportunities in the media sector with stronger content assets or higher free cash flow yields.
Underweight at Wells Fargo means:
Total return on stock expected to lag the Overweight- and Equal Weight-rated stocks within the analyst's coverage universe over the next 12 months.
How did the stock react? Once the InvestingPro headline hit at 5:02AM New York time, the equity declined about 50 cents to $33.54.
FOXA ended the day at $33.70, bucking the downgrade, as the scalpers captured alpha in the premarket — although shares were still off by
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