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On Tuesday, Citi maintained a positive outlook on FOX Corp. (NASDAQ: FOXA) by raising its price target to $50.00, up from the previous $47.00, while keeping a Buy rating on the stock. This adjustment follows FOX Corp.'s first-quarter financial results for the fiscal year 2025, which exceeded Wall Street's expectations.
FOX Corp. reported higher-than-expected revenue, adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and adjusted EPS (Earnings Per Share), with both the Television and Cable Network segments outperforming estimates. In response, Citi has modestly increased its estimates for EBITDA and revenue for the media company.
The new price target of $50 is based on approximately 10 times Citi's calendar year 2025 free cash flow per share estimate for FOX Corp. The firm's decision to uphold the Buy rating indicates confidence in the media company's performance and future prospects.
FOX Corp.'s strong quarterly results have prompted Citi to update its financial model, reflecting the company's current performance and its latest outlook. The positive adjustments to the financial estimates are a direct response to the solid earnings report from FOX Corp.
In summary, Citi's revised price target and maintained Buy rating for FOX Corp. underscores the company's robust financial results and favorable position in the market. The analyst's commentary highlights the key factors driving the decision, with a focus on the company's financial metrics and market performance.
In other recent news, Fox Corporation has reported a robust start to fiscal year 2025. The company's Q1 financials reveal an 11% increase in total revenues, reaching $3.56 billion, and a 21% rise in EBITDA, surpassing $1 billion. This growth was primarily driven by high audience engagement across Fox News and sports programming. The company also reported a net income of $827 million and repurchased $300 million in shares.
In addition to these developments, Fox Corporation's streaming service, Tubi, saw a revenue growth of 19%, and is projected to exceed $1 billion for the fiscal year.
The company's executives have expressed optimism about improving subscriber trends and the political advertising landscape. However, challenges such as a decline in NFL advertising revenue and increased sports rights fees were also noted.
InvestingPro Insights
FOX Corp.'s strong performance, as highlighted in Citi's positive outlook, is further supported by real-time data from InvestingPro. The company's P/E ratio of 10.14 suggests that it may be undervalued relative to its earnings, aligning with Citi's bullish stance. Additionally, FOX Corp.'s impressive revenue of $14.34 billion over the last twelve months underscores its solid market position.
InvestingPro Tips reveal that FOX Corp. has been aggressively buying back shares and offers a high shareholder yield, which could be contributing factors to its strong stock performance. The company's stock is currently trading near its 52-week high, with a remarkable 34.8% price total return over the past six months, reinforcing Citi's optimistic view.
For investors seeking a deeper understanding of FOX Corp.'s financial health and market position, InvestingPro offers 11 additional tips, providing a comprehensive analysis to inform investment decisions.
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