Fox Corporation Class A (FOXA): New Sell Recommendation for This Technology Giant

By Austin Angelo

Rosenblatt Securities analyst Mark Zgutowicz reiterated a Sell rating on Fox Corporation Class A (FOXAResearch Report) today and set a price target of $34. The company’s shares closed yesterday at $38.50.

Zgutowicz wrote:

“We estimate almost 60% of the increase from todays levels will be driven by reverse compensation, which importantly is not paid to FOXA on a per subscriber basis. However, this only accounts for 15% of consolidated subscription revenue and the remaining 85% (O&O retrans and cable networks) is paid on a per subscriber basis, and therefore faces direct headwinds from subscriber declines. We are encouraged management is maintaining strategic flexibility and looks to invest in its business. While no formal announced buyback likely disappointed some, we believe management has the right idea by choosing to organically and inorganically invest in the business and diversify away from the core pay-TV bundle.”

According to TipRanks.com, Zgutowicz is a 4-star analyst with an average return of 17.1% and a 55.6% success rate. Zgutowicz covers the Technology sector, focusing on stocks such as Spotify Technology SA, Pinterest Inc Class A, and Trade Desk Inc.

Currently, the analyst consensus on Fox Corporation Class A is a Moderate Buy with an average price target of $42.57.

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Based on Fox Corporation Class A’s latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of $2.75 billion and net profit of $529 million. In comparison, last year the company earned revenue of $3.11 billion and had a net profit of $869 million.

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Fox Corp. delivers compelling news, sports and entertainment content. It provides news under the brands FOX News, FOX Business, FS1, FS2, Big Ten Network, FOX Network and FOX Television Stations. The company is headquartered in New York, NY.