JPMorgan analysts downgraded shares of Fox Corporation (FOX) to Neutral from Overweight, lowering the price target to $36 from $40 per share in a note Friday.
The investment bank said the company's long-term strategy remains unclear as the media ecosystem increasingly pivots to digital.
"While FOX reported solid F1Q24 results, we downgrade shares to Neutral (from Overweight) and lower our 2024 price target to $36 (from $40) on more conservative long-term assumptions," the analysts explained.
"We like Fox’s concentrated news, sports, and broadcast strategy, which has buoyed shares vis-à-vis media peers during the industry-wide selloff of the last two years, but long-term strategic questions remain," they added.
They particularly question the lack of a wider digital strategy, adding that linear ecosystem subscriber losses will remain elevated in the coming years, with the pace of affiliate increases expected to fade.
"We appreciate FOX’s Tubi asset, but it remains unclear how the company will monetize its broad portfolio of news and sports content in this evolving linear video backdrop," the analysts added.