FOXA — Fox Corporation

Analyst consensus is a moderate Buy (25 buy/23 hold/0 sell) and the average price target is $70.38, but the stock slipped to $67.22 and valuation screens show trailing multiples above Fox’s 5-year averages. The megadeal overhang and murky FY27 earnings power keep sentiment constructive rather than euphoric.

Revenue rose from $16.30B in FY25 to $17.13B in FY26 (+5.1%), with operating cash flow up ~15.6% to $3.84B. Quarterly revenue is lumpy because of sports rights: Q4 FY26 jumped 28% to $4.21B on the FIFA World Cup, while Q3 FY26 fell 8.6% against a Super Bowl quarter in Q3 FY25. TTM operating margin is a strong 24.5%, though quarterly EPS is noisy (Q3 FY26 net margin was only ~4% despite a 20% operating margin, suggesting a non-operating charge). This is not a structural downtrend; it is a stable, high-margin franchise with sports-calendar timing and working-capital swings in quarterly FCF.

On trailing numbers FOXA is rich versus itself: P/E TTM is 15.5x versus the 5-year average of 13.0x, and P/S is about 1.55x versus the 5-year average of 1.31x. If the Street’s next-FY EPS estimate of $5.955 is taken literally, forward P/E is only ~11.3x, but that estimate is aggressive/unreliable given one-time sports events and Roku deal uncertainty. Net debt is modest (~$2.4B net of $4.2B cash), so the balance sheet is fine; the valuation question is whether the core business deserves a premium multiple with pay-TV in secular decline.

The market is pricing a stable high-margin cash generator plus optionality from Tubi/Roku, not an earnings collapse. The wide gap between 15.5x trailing and ~11.3x forward earnings says the Street expects a big FY27 earnings rebound. If Fox delivers that EPS and integrates Roku without major dilution, the stock is cheap; if the estimate is flattered by one-offs and the Roku deal destroys value, the current price already discounts most of the good news. Investors should demand visibility on pro-forma earnings before treating the forward P/E as the real valuation.

As of 2026-08-27, RSI(14) was 59.98, so the stock is not overbought or oversold. Price was 3.2% above the 20-day SMA, 14.6% above the 50-day SMA, and 6.0% above the 200-day SMA, so the intermediate trend is up after the pullback from the prior close of $69.60. The momentum setup is positive but a bit extended; a closer test of the 20-day or 50-day would be a more attractive entry than chasing after a 14% run above the 50-day.

• Secular pay-TV subscriber erosion continues, but Fox’s live sports/news affiliate fees are more resilient than general entertainment linear networks.
• Linear TV ad revenue is tied to the sports rights calendar - World Cup/Super Bowl years inflate revenue and make YoY comparisons lumpy.
• CTV/digital advertising growth supports Tubi and the strategic logic of the Roku acquisition.
• Interest rates drive both the valuation multiple and the cost of financing a $22B transformational deal.
• Regulatory and governance headline risk: Roku deal scrutiny plus Murdoch/News Corp re-merger chatter.

• Progress on the pending $22B Roku acquisition - financing details, regulatory approval, and integration guidance are the biggest swing factor.
• Goldman Sachs Communacopia conference on September 9, 2026, where COO John Nallen may provide FY27 outlook and Roku/Tubi digital monetization color.
• Fall 2026 programming slate and advertising demand following the upfront; plus the September 2, 2026 ex-dividend date.

• Roku acquisition risk: paying ~$22B (~75% of Fox’s current market cap) for an unprofitable CTV platform could dilute equity, add debt, and fail to deliver expected synergies.
• Accelerating cord-cutting or affiliate-fee renegotiations at Fox News/Fox Sports would hit the core cash engine.
• Sports rights cost inflation and renewal competition could compress the ~24.5% operating margin.
• Advertising recession, ratings decline, or political/regulatory backlash affecting Fox News.
• Governance overhang from Murdoch family/News Corp re-merger speculation could distract management and create headline volatility.

Fox is one of the highest-quality linear media businesses left - 24.5% TTM operating margin, ~$3.4B FY26 free cash flow, low net debt, and durable pricing power in live sports and news. But the stock is priced above its own historical multiples, and the pending Roku acquisition is a massive, unmodeled strategic bet. I would not chase it here; it is a good business to own at a better price or after the Roku deal math becomes clear.

Simplified DCF using normalized free cash flow of roughly $3.0B (between FY25’s $2.99B and FY26’s $3.40B, adjusted for sports calendar strength), 0% terminal growth, and a conservative 9% discount rate gives enterprise value of $33.3B. Adding $4.2B cash, subtracting $6.6B debt, and dividing by ~438.5M shares yields ~$70.53; this excludes any value creation/destruction from the pending Roku deal.