Fox Corporation, the media giant known for its powerful presence in sports and news, is poised for growth thanks to upcoming major events. The company is expected to benefit significantly from the Super Bowl LIX broadcast in February 2024 and the 2024 presidential election.
Bank of America analyst Jessica Reif Ehrlich, in an optimistic outlook, reiterated a ‘Buy’ rating on Fox stock and even raised the price target from $45 to $50. Ehrlich highlighted the strategic positioning of Fox’s portfolio, particularly in sports and news, which has allowed the company to navigate the ongoing challenges in traditional linear television broadcasting. She believes that this robust portfolio will drive positive results in the first fiscal quarter and beyond.
The 2024 election, with its heightened media coverage, is already demonstrating strong growth in advertising and viewership for Fox. Ehrlich notes that Fox’s local TV stations are on track to exceed their 2020 presidential election revenue of $230 million in political advertising alone. The Super Bowl LIX, which Fox will be broadcasting, is also expected to generate significant revenue. The analyst points out that demand for Super Bowl advertising is incredibly high, with nearly all inventory already sold. Fox is asking for a hefty $7 million for each 30-second ad during the game.
Beyond these events, Fox is seeing impressive viewership numbers for NFL games, with a 12% year-over-year increase in viewership through the first two weeks of the season. Fox secured the third most-watched NFL game in those weeks, with a staggering 23.9 million viewers tuning in for the Dallas Cowboys vs. Cleveland Browns matchup.
Fox’s strategic focus on sports and news has also allowed it to minimize its reliance on entertainment advertising, providing a significant advantage in the evolving media landscape. However, Ehrlich acknowledges that continued weakening in linear television trends may lead Fox to explore migrating content to streaming platforms. The analyst also points to the potential need for Fox to consider alternative options, such as a standalone direct-to-consumer product for sports and news, in the face of litigation concerning a joint venture.
Fox stock, currently trading at $38.44, is up 36.5% year-to-date in 2024. The company’s strong performance and promising outlook make it a compelling investment opportunity for those seeking exposure to the media sector.
