FOXA Stock Plunges To 52-Week Low: BofA Thinks It May Stay In ‘Deal Limbo’ Even With A World Cup Catalyst

According to a report from Investing.com, BofA Securities reiterated an ‘Underperform’ rating on the stock with a $54 price target.

• BofA said that while Fox is well-positioned to benefit from advertising tied to the FIFA World Cup, it expects shares to remain range-bound amid the pending acquisition of Roku.
• The analyst also said that Fox's exposure to linear television and potentially higher NFL media rights costs could weigh on earnings after fiscal 2027, limiting upside for the shares.
• Earlier this month, Fox agreed to acquire Roku in a $22 billion cash-and-stock deal, offering $160 per share.

Shares of Fox Corp. (FOXA) plunged to a 52-week low of $48.34 on Thursday before closing down 1.89% lower amid lingering concerns over its $22 billion acquisition of streaming platform Roku Inc. (ROKU).

Meanwhile, according to a report from Investing.com, BofA Securities reiterated an ‘Underperform’ rating on the stock with a $54 price target, adding that while the company is well positioned to benefit from advertising tied to the FIFA World Cup, it expects shares to remain range-bound amid the pending Roku acquisition.

FOXA Stock: BofA Stance

According to the report, BofA raised its fourth-quarter revenue forecast for Fox to $3.64 billion from $3.59 billion. The brokerage expects cable revenue to increase 4.8% year over year, while television revenue is projected to climb 17.1%, supported by robust World Cup advertising demand and subscriber additions to the Fox One streaming platform.

The analyst added that Fox's portfolio of live sports and news content is expected to continue outperforming the broader linear television market.

BofA also said investor focus has shifted to the company's planned acquisition of Roku, which it believes will expand Fox's presence in the fast-growing connected TV space and generate long-term revenue and cost synergies. However, the firm expects the stock to remain in "deal limbo" until the transaction, slated to close in the first half of 2027.

BofA Securities has raised its fiscal 2027 earnings forecast to $3.93 billion from $3.86 billion, reflecting stronger cable advertising expectations, and lifted its 2027 earnings per share estimate to $5.76 from $5.63.

Despite the improved outlook, the analyst said that Fox's exposure to linear television and potentially higher NFL media rights costs could weigh on earnings after fiscal 2027, limiting upside for the shares.

Fox-Roku Deal Contours

Earlier this month, Fox agreed to acquire Roku in a $22 billion cash-and-stock deal, offering $160 per share, comprising $96 in cash and $64 in Fox Class A stock. The transaction is expected to create the third-largest U.S. television company by viewing share, combining Fox's sports, news, and entertainment assets with Tubi and Roku's connected TV platform and streaming ecosystem.

Fox expects the acquisition to accelerate its digital strategy and deliver about $400 million in annual cost synergies, funded through a mix of cash, debt, and $12 billion in bridge financing from Morgan Stanley.

However, investors are concerned that the deal will increase Fox’s debt burden and lead to equity dilution.

FOXA Stock: Retail Stance

On StockTwits, retail sentiment around FOXA was in the ‘bearish’ territory at the time of writing.

One bearish user said, “moved to NFLX.”

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However, another user said, “YES ! $ROKU does make $FOXA more Valuable!”

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FOXA stock has plunged nearly 34% so far this year.

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