Wells Fargo says it’s time for investors to pause on Fox Corp shares. while some uncertainties loom. Analyst Steven Cahall downgraded the Media stock to an equal weight to overweight in a Friday note, citing the lack of near-term catalysts for stocks. Cahall cut the bank’s price target to $35 from $44 per share, suggesting upside potential of about 14% from Thursday’s close. FOXA mountain 2023-04-30 Fox Corp. shares this month “We liked FOXA when EBITDA was up, sports betting looked promising and for its relative track record when rates were up,” he wrote. “Looking ahead, there’s a lot less to get excited about.” Shares lost more than 3% before the bell in light trading. The stock is up about 1% this year despite falling about 8% this month. Earlier in the week, Fox posted a loss for the latest quarter due to costs related to its settlement with Dominion Voting Systems. Despite a “pristine” record, Fox remains one of the names most at risk for cord cutting, Cahall wrote. This, coupled with a 7-8% growth in sports rights costs, means that the company’s prices must increase at an annual growth rate of at least 15% to “remain earnings neutral”. “We believe there is benefit in monetizing FOXA’s digital sports rights through licensing, but if and when that happens is still to be determined,” he wrote. “We are evenly matched until management signals what the future of its distribution of (mostly) sports content in alternative media might look like.” – CNBC’s Michael Bloom contributed reporting
