synopsis

Analysts at MoffettNathanson see limited upside potential for Fox stock from current levels as investors question the sustainability of the company’s current strong cash flow.

New York-based news, sports, and entertainment company Fox Corp. (FOXA) is scheduled to report its fiscal year 2025 second-quarter results at 8 a.m. ET on Tuesday, with the earnings call set to start half an hour later. 

The consensus second-quarter estimates for top- and bottom-line results are $0.64 and $4.82 billion, respectively, according to Yahoo Finance database. This compares to the $0.34 and $4.23 billion reported for the year-ago quarter and $1.45 and $3.56 billion reported for the previous quarter.

The first quarter’s 11% year-over-year revenue growth was aided by a 6% increase in affiliate fees ($1.84 billion) and nearly 11% advertising revenue growth ($1.33 billion). Segment-wise, cable network programming revenue climbed 15% to $1.60 billion and television revenue rose a more modest 9.7% to $1.95 billion.

Quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 21% YoY to $1.05 billion.

During the quarter, Fox announced that the proposed multichannel video programming distributor (MVPD) service Venu Sports in collaboration with Walt Disney Co.’s (DIS) ESPN and Warner Bros. Discovery, Inc. (WBD), was shelved. 

In late January, MoffettNathanson downgraded Fox stock to ‘Buy’ from ‘Neutral’ but nudged up the price target by a dollar to $52, TheFly reported. The firm said the stock has re-rated due to the company’s unique position despite the challenging ecosystem, its fundamental strength and M&A rumors.

Analysts at the firm see limited scope for upside from current levels as investors question the sustainability of the company’s current strong cash flow. 

FOXA sentiment and message volume February 3, as of 3:43 am ET | Source: Stocktwits

On Stocktwits, retail sentiment toward Fox stock stayed ‘bullish’ (73/100), with message volume remaining at ‘extremely low’ levels.

A retail watcher signaled they are bullish on the stock due to a report that said Fox has sold out ad spots for the upcoming Super Bowl.

Fox stock has gained 5.4% in January on top of the 66% jump in 2024. The stock ended Friday’s session up 0.31% at $51.18.

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