Fox Increases Share Buyback Authorization by $2B; Shares Gain 3%


Fox Corporation (FOXA), the mass media company, announced an up to $2 billion additional stock repurchase authorization of the company’s Class A and Class B common stock. In the extended trading session on June 17, shares of the company rallied 2.8%.

Including the previously announced buybacks program, total authorization has increased to $4 billion, of which more than $1.56 billion have been repurchased so far.

Notably, the program comes with no expiration date, and Fox will be carrying out repurchases in the open market or alternatively, a combination of Class A and Class B common stock.

Fox Executive chairman and CEO Lachlan K. Murdoch said, “We remain committed to deploying capital to maximize long-term stockholder value through a balanced approach of appropriate organic investment, accretive M&A, and returns of capital to our stockholders.” (See Fox stock chart on TipRanks)

On June 9, Wells Fargo analyst Steven Cahall upgraded the rating on the stock to Buy from Hold and increased the price target to $47 from $42. This implies 26.5% upside potential to current price levels.

Cahall noted, “The last time Fox had a ‘lack of strategy’ in investors’ minds it surprised us all with the Disney deal, so we’re willing to argue there’s a new pivot at play with the Murdochs. Our detailed sports betting scenario analyses indicate potential share price accretion of 17-34% over the next couple of years.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 9 Buys, 4 Holds, and 1 Sell. The FOXA average analyst price target of $42.25 implies 13.7% upside potential from current levels.

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