This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

21st Century Fox Rises as Credit Suisse Talks Sports

NEW YORK ( TheStreet) - 21st Century Fox (FOXA - Get Report), the television and film arm of the newly split News Corp., gained in its first trading day as a separately-owned company, as Credit Suisse said the company's expanded sports programming will accelerate sales.

Credit Suisse, in a report by analysts led by Michael Senno, placed a $34 price target on Fox shares, which were gaining 1.6% to $29.43 on Monday. News Corp (NWSA - Get Report), the news and publishing company which counts the Wall Street Journal among its holdings, was falling 1.9% to $14.96. News Corp. has lost 5.3% since the shares began trading separately on June 20.

Fox is expected to outperform its peers, said Credit Suisse as Fox Sports 1 and FXX take advantage of expanded international networks and the acquisition of programming. These investments will weaken earnings before some costs growth by about 10% this year but "we expect these investments to yield solid long term returns, driving mid-teens total EBITDA growth in FY15-16E," the analysts wrote in a report published Monday. The New York-based company is forecast to offset current revenue weakness with its World Series and Super Bowl events.

Sports offerings are expected to bring in 21% growth, to $984 million, as the company increases digital distribution and syndication. Fox sees lower costs and growth at their European sports broadcasting networks; Sky Italia and SkyD. The cost reductions for Sky Italia are not expected to take full effect until 2015. "Fox stands to benefit from the increasing value of content and growth in pay TV penetration in emerging markets given its strong sports rights portfolio and leading market position in key international markets," Credit Suisse said in a report.

While sports are predicted to drive Fox's future, expectations for the company's film division have decreased. Filmed entertainment earned $1.1 billion in earnings before costs during 2012, leading analysts to estimate 9.5% growth to $1.24 billion for 2013, which has been lowered to 2.8% or $1.16 billion, due to poor box office performance.

Credit Suisse expects Fox to have lower ad exposure as it grows its retrans revenue and digital broadcasting subscriptions. "We prefer stocks with lower ad revenue and higher revenue visibility in light of macroeconomic uncertainty," wrote the analysts.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
FOXA $33.60 -1.00%
NWSA $15.15 -1.30%
AAPL $130.28 -1.14%
FB $79.19 -1.19%
GOOG $532.48 -1.40%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs