On Tuesday, Citi updated its financial model for FOX Corp. (NASDAQ: FOXA), leading to an increased price target for the company’s shares. The new price target is set at $47.00, up from the previous $40.00, while the firm retains a Buy rating on the stock.

The adjustment comes after FOX Corp. reported its fourth-quarter earnings for fiscal year 2024, which showed revenues falling slightly short of market consensus. However, the company’s adjusted EBITDA and adjusted EPS exceeded expectations. Based on these results, Citi has made modest upward revisions to its fiscal year 2025 and 2026 estimates for FOX Corp.

The rationale for the price target increase is twofold. Firstly, Citi has rolled its target year from calendar year 2024 to 2025. Secondly, the new target incorporates an approximate $2 value associated with FOX Corp.’s option to acquire a significant stake in the sports betting company FanDuel. Specifically, FOX Corp. has the option to purchase an 18.6% interest in FanDuel, which is factored into the valuation.

Citi’s maintained Buy rating suggests a positive outlook on FOX Corp.’s stock, indicating the firm’s belief that the stock will perform well in the market. The incorporation of the potential FanDuel stake into the price target reflects an added value proposition for FOX Corp.’s investment portfolio.

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