Bank Of America Starts 'New Fox' With Buy Rating, Cites Proven Brand Track Record

Bank of America Merrill Lynch on Wednesday initiated coverage of the new Fox Corporation (NASDAQ: FOXA) with a bullish thesis on the stock, citing the new company’s proven TV network brands and its already strong subscription revenue.

The Analyst

Bank of America's Jessica Reif Ehrlich began coverage of Fox with a Buy rating and $52 price target.

The Thesis

The new Fox is made up of the main TV assets of the former 21st Century Fox company, including the FOX Broadcast Network, Fox News, and several other cable networks, including Fox Sports and the Big Ten Network.

Ehrlich believes Fox is positioned to do well because the brands are already well-known, they’re focused, with a concentration on live news and sports content and already have strong subscription revenue, with continuing subscriber growth.

The new Fox Corp. began trading this week after its spinoff, but shares dropped on Tuesday and Wednesday.

Price Action

Shares of Fox were down 3.5 percent at $38.92 at time of publication.

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Photo credit: "Fox New projects itself inside the rotunda of the Iowa State Capitol. Photos from a walk around downtown Des Moines, two days before the Iowa caucuses." By Phil Roeder from Des Moines, IA, via Wikimedia Commons