NEW YORK (TheStreet) - Everybody loves Rupert.
Fresh off an investor day in Los Angeles with executives of 21st Century Fox (FOXA), Wall Street analysts were effusive, gushing over the potential for Murdoch's newly-focused television and film company to attain an even higher stock price despite having already gained 29% this year and trading at a 20 times estimated 12-month earnings, its highest valuation in at least 18 months, according to data compiled by Bloomberg.
Wells Fargo analyst Marci Ryvicker raised her longterm earnings outlook while reiterating an outperform rating. Ryvicker declared that even as the company is investing in the short term - Fox Sports 1, FX - Murdoch still has plenty of cash and credit available to finance acquisitions. Fox's profit margins, accounting for some adjustments, Ryvicker said, are higher than any rival entertainment company.
Shares of New York-based Fox were adding 0.1% to $32.82 in mid-day trading.Looking ahead, Ryvicker issued her first forecast for 2015, projecting that Fox can be expected to post earnings of $1.80 per share, a 19% increase above her 2014 estimates, on revenue of $31.9 billion, a 6% increase. Earnings before interest, taxes, depreciation and amortization in 2015 should generate $7.7 billion. The message is clear: Fox is doing just fine. Her reasons for optimism include The Simpsons, which goes into syndication in 2015 and Modern Family , which has been sold across distribution outlets starting in the fall of 2014. Fox Sports 1, the company's ambitious attempt to challenge Disney's (DIS) ESPN, is scheduled to go live on Aug. 17. Additionally, Fox will be increasing its ownership stake in the YES Network, home of the New York Yankees and Brooklyn Nets, to 80% from 50% by the company's fiscal year 2016. "We think when investors compare BOTH the near-term and the long-term growth rates of FOXA to the rest of the group, as well as incorporate monetization of some of the company's hidden value, the stock will continue to move higher," Ryvicker said. Barclays' Doug Mitchelson made Fox his top pick among media stocks, emphasizing that the company has the fastest growth rate in the entertainment group, and that management is no longer encumbered by the headache known as print, having spun-off its publishing assets in June into the reconfigured News Corp (NWSA).
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