Fox Corporation (FOXA) has reported a robust fiscal Q2, prompting BofA Global Research to reiterate its "Buy" rating and raise the price objective to $60 from $55, based on approximately 8x the updated CY25E EBITDA forecast. The company's total revenue surged 20% y/y, with OIBDA soaring 123%, driven by a 31% increase in cable revenue and a 16% rise in TV revenue. The adjusted EPS of $0.96 surpassed BofA's estimate of $0.62, reflecting strong performance across segments.
Key highlights include the impressive growth of Tubi, which saw a 31% y/y increase, and the strategic decision to launch an OTT service following the Venu shutdown. This move is seen as a prudent step to capture digital audiences outside the traditional linear ecosystem. BofA notes, "We believe Fox is well-positioned in FY25 and should benefit from an improving advertising backdrop and a healthy balance sheet."
Following the earnings beat, BofA has raised its FY25E revenue forecast to $15.85 billion and OIBDA to $3.36 billion. The FY25E EPS estimate has also been increased to $4.23 from $3.93. Fox's focus on sports and news content, along with securing carriage for Fox News in new skinny bundles, is expected to insulate it from broader industry headwinds.
Fox Corporation was trading at $53.75, down 1.63% on February 5, at 9:40.