Wells Fargo downgraded Fox stock to "equal weight"
Wells Fargo downgraded the shares of Fox Corp (NASDAQ:FOXA) to "equal weight" from "overweight," and lowered the price target by $9 to $44. The firm said the media giant faces headwinds from its dispute with FanDuel.
The analyst noted that Fox likely has a streaming monetization upside, but demand for linear TV and cost for sports rights are dragging sentiment. The downgrade also follows a $54 million net loss after Fox agreed to pay $787.5 to Dominion Voting Systems to settle a defamation lawsuit concerning false claims over voting machines and the 2020 presidential election results.
Ahead of the bell, Fox stock is down 2.2% to trade at $30. The equity has turned in six losses in the last eight sessions, and is pacing for its third-straight weekly loss. Should FOXA move any lower today, it could turn red for the year.
Coming into today analysts were mostly bearish, but there's still room for pessimism to build. Specifically, five covering brokerages say "strong buy," while one rates FOXA a "buy," against nine "hold" or worse recommendations. Plus, the consensus 12-month price target of $36.15 is a 17.9% premium to last night's close, which could signal more price-target cuts ahead.
It's also worth noting that short interest decreased by 16.1% in the two most recent reporting periods, and 7.4% of the security's total available float is now sold short.