Wells Fargo says it’s time for investors to take a breather on shares of Fox Corp . as some uncertainties loom. Analyst Steven Cahall downgraded the media stock to equal weight from overweight in a Friday note, citing lacking near-term catalysts for shares. Cahall trimmed the bank’s price target to $35 from $44 a share, suggesting about 14% upside potential from Thursday’s close. FOXA mountain 2023-04-30 Fox Corp. shares this month “We liked FOXA when EBITDA was growing, sports betting seemed promising and for its relative balance sheet appeal when rates were going higher,” he wrote. “Looking ahead there’s a lot less to get excited about.” Shares lost more than 3% before the bell on light trading. The stock’s up about 1% this year despite a roughly 8% fall this month. Earlier in the week, Fox posted a loss for the recent quarter as it dealt with costs connected to its settlement with Dominion Voting Systems. Despite a “pristine” balance sheet, Fox remains one of the most exposed names to cord-cutting, Cahall wrote. That, coupled with 7% to 8% growth in sports rights costs, means the company’s pricing needs to compound at an annual growth rate of at least 15% to “stay earnings neutral.” “We do think there is monetization upside to FOXA’s sports rights in digital via licensing, but if and when that happens is all still TBD,” he wrote. “We’re Equal Weight until there’s signaling from mgmt on what the future of its (primarily) sports content distribution could look like in alternative mediums.” — CNBC’s Michael Bloom contributed reporting
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