TLDR
- Bank of America upgraded Fox (FOX) to Buy from Underperform, a two-step jump.
- The price target rose to $85 from $54, about 37% above the $62.21 last close.
- BofA says the pending Roku (ROKU) deal changes the stock’s risk/reward.
- Near-term NFL renewal risk has mostly faded until the 2029 opt-out window.
- BofA sees $400 million in cost synergies and about $700 million in 2028 EBITDA uplift.
Fox (FOX) stock closed at $62.21 before Bank of America double upgraded it to Buy from Underperform on Friday. FOX was up about 1% in Friday trading. Two notches in one move is not something you see every day.
Analyst Jessica Reif Ehrlich raised the price target to $85 from $54. That is about 37% above the last close.
The new target equals about 10 times BofA’s updated 2028 pro forma EV/EBITDA estimate. The bank says pro forma numbers are now a better way to value Fox.
The reason is the pending Roku (ROKU) acquisition. The deal is expected to close in early 2027.
Roku traded at $155.05 on Friday, up 0.25%.
Why BofA Changed Its View
The old Underperform rating reflected two worries. One was the risk of an early NFL renewal, and the other was Fox’s long-term position as media shifts toward streaming.
BofA says the near-term NFL risk has largely faded. The next opt-out window is in 2029.
Reif Ehrlich said the Roku deal changes the story. She noted that both companies enter the deal with operating momentum.
“Fox has historically been a superb operator,” she wrote, which gives her confidence in a smooth integration. That is a vote of confidence in management as much as in the deal.
She also said Roku gives Fox a credible path to move its mostly linear portfolio toward direct-to-consumer. She called that Fox’s biggest weakness.
What BofA Expects From the Deal
BofA views the $400 million cost synergy target as highly achievable. That is about 10% of the combined SG&A and corporate cost base.
The bank projects base-case revenue synergies of about $530 million. Its bull case is $1.07 billion.
Together, those figures imply roughly $700 million in total 2028 EBITDA uplift. BofA is treating that as the core of its valuation.
Reif Ehrlich added that the base case does not include every revenue opportunity. She said that leaves room for more upside over time.
The Roku deal is still expected to close in early 2027. On Friday, FOX was up 1.14% after closing at $62.21, while ROKU was up 0.25% at $155.05.
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