Fox Seen Gaining Revenue, Cost Synergies From Roku Deal, BofA Says

MT Newswires Live10-16

Fox (FOX) could see improved growth prospects and a stronger position in streaming through its planned acquisition of Roku (ROKU), which is expected to create significant revenue and cost synergies, BofA Securities said in a Friday note.

The investment firm estimates $530 million in base-case revenue synergies and project about $400 million in cost synergies amid advertising efficiencies, streamlined ad-tech platforms and lower overhead.

Revenue opportunities include bundling Fox's sports content with Roku's connected-TV advertising inventory. Another opportunity is attracting small businesses through Roku Ad Manager and Fox's local sales network, according to the note.

The investment firm expects the combined company to achieve high-single-digit revenue growth, compared with low- to mid-single-digit growth for Fox on a standalone basis. It also anticipates margin expansion and healthy free cash flow. The deal is expected to close in early 2027.

BofA upgraded its rating on Fox to buy from underperform and raised its price objective to $85 from $54.

The company's shares were up nearly 2% in early Friday trading.

Price: 58.22, Change: +1.08, Percent Change: +1.89

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment