FOXA Stock Forecast & Price Target

Fox has demonstrated a robust financial performance in the first quarter of FY26, highlighted by a 3% increase in distribution revenue to $1.9 billion, achieving higher subscriber rates despite an ongoing decline. Advertising revenue also showed significant growth, increasing by 6% year-over-year to $1.4 billion, supported by gains from digital platforms like Tubi, alongside improved pricing and ratings in the news and sports segments. Furthermore, Fox News is benefiting from strong advertiser demand, with scatter pricing exceeding upfront rates by over 50%, while Tubi has not only reached profitability but also accelerated its revenue growth to 35% year-over-year, emphasizing Fox's potential for sustained financial strength.

Fox's financial outlook is negatively impacted by a significant decline in operating cash flow, which recorded -$130 million in the first quarter of FY26, a stark contrast to the $158 million positive cash flow in the same period the prior year, largely due to lower political advertising receipts and elevated programming costs. Additionally, the company's free cash flow forecast for FY26 is only $1.4 billion, reflecting ongoing working capital challenges and higher tax payments, compounded by a reduction in free cash flow to -$354 million in the first quarter. Despite a slight moderation in subscriber erosion, Fox remains heavily dependent on the pay-TV bundle for revenues, contributing to ongoing uncertainty within the media ecosystem and placing its stock under pressure relative to the broader market valuation.