Fox Corp (NASDAQ:FOXA) is set to benefit from a ramping political cycle when it hands down its latest quarterly earnings report, analysts at UBS believe.
Ahead of Fox reporting its fiscal first quarter 2025 financial results in November, analysts awarded the ‘Buy’-rated stock a $44 price target, implying upside of about 13.5% to its current share price.
Wall Street analysts, on average expect Fox to report a 5% increase in revenue to $3.37 billion and earnings per share of $1.12, compared to $1.09 in the year-ago quarter.
“Our estimates are largely unchanged and we look for 4.2% year-over-year total affiliate growth (versus 5% last quarter) and total ad up 9% as [streaming platform] Tubi growth, solid sports spend, political ad and better cable ratings help offset entertainment softness,” the USB analysts wrote in a note to clients.
Cable affiliate growth is expected to grow 1.1% in the fiscal first quarter as higher renewal pricing offsets a sustained decline in subscribers.
“We expect stronger pricing power at Fox longer term with much of its key programming still exclusive to linear,” analysts wrote.
Cable advertising is seen growing 9%, compared to 2.5% growth last quarter, and EBITDA is forecast to grow 5% to $636 million, driven by higher affiliate and advertising revenues net of more normalized growth in costs.
In Fox’s TV segment, analysts expect 9% total advertising growth, compared to a 1% decline last quarter driven by a reacceleration in Tubi growth, a higher mix of sports, and ramping political advertising.
TV EBITDA is seen “flattish” at $352 million amid higher sports costs.
The bank’s analysts see earnings before interest, taxes, depreciation and amortization (EBITDA) of $903 million, above the Street consensus of $882 million.
“We expect this to be followed by growth in F2Q as political ad ramps and WWE savings are realized,” they wrote.
Fiscal 2025 EBITDA is pegged at $3.19 billion, compared to the Street expectation of $3.08 billion supported by political advertising, WWE savings and improving Tubi losses.