Wells Fargo analyst Steven Cahall on Monday downgraded his ratings on Fox Corp. shares from “equal weight” to “underweight,” citing Fox “News risks, cord-cutting risks, earnings risks.”Cutting his stock price target by $4 from $35 to $31, he wrote: “Fox’s earnings are mostly Fox News earnings, and Fox News is facing viewership and share pressures. Viewership is down 19 percent January-June ’23 versus January-June ’21 due to cord-cutting and/or programming.”Cahall also cited other data and trends as a concern. “We estimate 7-8 percent cord-cutting, with a downside bias.” Warned Cahall: “Fox Cable could soon go ex-growth on EBITDA like we’ve seen for peer linear nets. TV has better topline growth, but less ability to reduce costs due to sports rights.” Any worse-than-expected cord-cutting trends could provide further downside risk, he emphasized. Cahall lauded Fox’s “strong balance” and noted that it looks cheap, but warned investors: “Cheap is not a thesis.” After all, “while Fox looks inexpensive, so does Warner Bros.

Source: Fox News July 10, 2023 16:09 UTC