On Monday, CFRA analyst Kenneth Leon upgraded FOX Corp. (NASDAQ:FOXA) from Sell to Hold and increased the price target to $46 from $38. The adjustment follows FOX Corp.'s robust performance in the September quarter, which prompted CFRA to revise their fiscal year earnings per share (EPS) estimates upwards. For FY 25 ending in June, the EPS estimate was raised by $0.70 to $4.50, and for FY 26, it was also increased by $0.70 to $4.40.
The analyst highlighted that FOXA's September-quarter earnings per share of $1.78 exceeded the consensus estimate of $1.13. This beat was attributed to a 5.6% revenue increase, spurred by the election news cycle and live sports events. Adjusted EBITDA for the company went up by 12%, with significant contributions from cable network programming and television.
In terms of revenue composition, affiliate fees, which represent 52% of total revenue, grew by 5.9%. Advertising revenue, accounting for 37% of the total, increased by 10.8%, while the 'other' category saw a substantial rise of 46.8%. Although specific figures were not fully disclosed, Tubi, FOX Corp.'s free advertising streaming service, experienced strong growth.
The report also noted FOX Corp.'s financial health, with cash and cash equivalents amounting to $4.1 billion and a debt level of $7.2 billion. The company's free cash flow stood at $0.94 million after accounting for share repurchases of $250 million and dividend payments totaling $135 million.
Finally, the analyst mentioned FOX Sports' robust advertising performance, led by major events in the NFL, MLB, and college football. While efforts to bundle sports offerings with other streaming partners remain ongoing, FOX Corp. has demonstrated a strong operational quarter.
In other recent news, Fox Corp. has been the subject of significant developments. The company experienced an upgrade in stock rating from 'Sell' to 'Hold' by a CFRA analyst, following a notable performance in the September quarter. The full-year earnings per share (EPS) estimates for fiscal years 2025 and 2026 were revised upward, and a new price target of $46.00 was set.
Fox Corp. reported an EPS of $1.78 for the September quarter, surpassing the consensus estimate of $1.13. Revenue increases were driven by heightened activity in the election news cycle and live sports broadcasting, with a 5.6% beat. The company reported a healthy financial position with cash and cash equivalents totaling $4.1 billion and a debt of $7.2 billion.
The company exceeded Wall Street's revenue forecasts for the first quarter, thanks to a surge in political advertising. Fox reported an 11% rise in advertising revenue, reaching $1.33 billion, which outperformed the average analyst estimate. The television segment was a strong contributor to this performance, with revenues of $1.95 billion.
In the Cable Network (LON:NETW) Programming division, Fox's revenue was reported at $1.60 billion, surpassing the analysts' projection. Overall, the company announced a total quarterly revenue of $3.56 billion, which exceeded the expected $3.37 billion. On an adjusted basis, earnings were $1.45 per share, which was also above the anticipated $1.11 per share.
InvestingPro Insights
FOX Corp.'s (NASDAQ:FOXA) recent performance aligns with several key metrics and insights from InvestingPro. The company's P/E ratio of 12.4 suggests it's trading at a relatively low valuation compared to its earnings, which is particularly noteworthy given the recent earnings beat and upward revision of estimates by CFRA.
An InvestingPro Tip highlights that FOX has been aggressively buying back shares, which is consistent with the $250 million in share repurchases mentioned in the article. This strategy, combined with the company's dividend payments, underscores FOX's commitment to returning value to shareholders.
Another relevant InvestingPro Tip indicates that FOX has raised its dividend for 4 consecutive years, reflecting the company's financial stability and growth. This is particularly significant given the strong free cash flow of $0.94 million reported in the article, which supports the company's ability to maintain and potentially increase shareholder returns.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for FOX Corp., providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.