Fox Gains as Roku Deal and Ad Upside Lift Analyst Outlook

Key Moments

Brokerage Upgrades and Target Price Revisions

Fox Corp. was lifted to Overweight from Neutral by both J.P. Morgan and Wells Fargo, with each firm boosting its price target on the stock. The upgrades focus on stronger earnings visibility, resilient advertising dynamics, and the expected impact of Fox’s planned purchase of Roku.

J.P. Morgan raised its fiscal 2027 and 2028 adjusted EBITDA projections for Fox by 7% and 9%, respectively, after reviewing the company’s fourth-quarter performance. The firm pointed to favorable FIFA World Cup economics, a constructive outlook for political advertising, ongoing strength in broader ad trends, and improved distribution revenue.

Television and Tubi Power Earnings Momentum

Both firms highlighted Fox’s traditional television segment and its Tubi streaming business as core drivers underpinning the brighter forecast.

J.P. Morgan said the strength in television and Tubi supports the firm’s more optimistic stance. Tubi’s growth was attributed in part to a 17% increase in viewing time, with the platform projected to close fiscal 2026 at 110 million monthly active users.

World Cup, Political Ads, and Media Rights Strategy

J.P. Morgan anticipates additional upside from the 2026 FIFA World Cup and what it views as a record political advertising cycle. On this basis, the broker lifted its fiscal 2027 television EBITDA estimate by 30% to $1.49 billion.

The firm also noted that Fox’s choice not to accelerate negotiations on its current NFL media rights agreement removes what it described as a significant near-term overhang on the stock.

Wells Fargo similarly revised its expectations higher, raising its fiscal 2027 EBITDA estimate to $4.12 billion from $3.85 billion. The firm now forecasts World Cup revenue of about $800 million, compared with its prior forecast of more than $600 million.

Wells Fargo’s upgraded television segment forecast for fiscal 2027 – now $1.6 billion versus $1.3 billion previously – reflects its view of stronger political advertising, increased World Cup-related revenue, and the contribution from Fox’s digital initiatives.

Roku Deal Seen as Transformational for Streaming and Ads

The planned acquisition of Roku is a central pillar of the bullish case laid out by both institutions. J.P. Morgan argued that merging Tubi with Roku’s streaming platform would establish what it describes as the largest free ad-supported streaming television operator, enhancing Fox’s long-term growth trajectory.

The firm also pointed to the opportunity for Fox to apply its advertising capabilities across Roku’s base of more than 100 million streaming households, which it believes could raise the overall growth and earnings profile of the combined entity.

Wells Fargo quantified part of that potential, estimating that the transaction could deliver around $300 million in advertising revenue synergies within roughly two years. The firm attributed this to higher pricing and fill rates for Roku Channel inventory, increased revenue from homescreen advertising, and better monetization of third-party streaming inventory on the platform.

Valuation and Re-rating Potential

In its valuation commentary, J.P. Morgan stated that Fox’s pro forma valuation remains below the level implied by its $82 price target. The firm believes this gap leaves room for a re-rating as investors increasingly come to see the combined Fox-Roku entity as a scaled connected-TV platform with access to first-party data and expanded advertising opportunities.