Analysts bullish on Twenty-First Century Fox

Monday, July 01, 2013 2:15 PM ET

By Mikolo Ilas

Analysts are mostly bullish on Twenty-First Century Fox Inc. following the completion of its separation from News Corp.

Lazard Capital Markets started coverage on Twenty-First Century Fox with a "buy" rating. In a July 1 research report, analyst Barton Crockett noted that the media and entertainment company's $34 price target implies a 17% upside on the stock, based on a sum-of-the-parts build of the company's businesses. He added that growth in operating profits to come from the company's TV networks is not fully discounted. 

Meanwhile, Evercore Partners started Twenty-First Century Fox with an "overweight" rating and a $34 price target, The Hollywood Reporter reported July 1. Analyst Alan Gould estimated a 21% EPS growth rate for the company and added that the stock trades at the high end of entertainment companies, despite having a price-to-earnings multiple that is lower than its growth rate.

Credit Suisse reportedly launched coverage on the company with an "outperform" rating. Analyst Michael Senno, who attached a $34 price target on the company's stock, noted that long-term returns can be expected from long-term investments such as Fox Sports 1, FXX, new sports rights acquisitions and international sports networks.

Wells Fargo analyst Marci Ryvicker gave an "outperform" rating and a stock price target range of $34 to $36 on Twenty-First Century Fox. Ryvicker cited upside potential for Fox Sports 1, as well as a higher leverage target for the company, and noted that Wells Fargo continues to view the company as a "compelling opportunity," according to the Reporter.

Davenport & Co. analyst Michael Morris stated last week that 21st Century Fox's shares are "attractively priced." Morris, who gave a $33 price target on the company's stock, reportedly stated that "investors still underappreciate the company's unique and strongly positioned growth drivers."

Meanwhile, Wedbush started Twenty-First Century Fox with an "outperform" rating and a $31 price target, while Deutsche Bank initiated coverage on the media conglomerate with a "buy" rating and a $33 price target, theflyonthewall.com reported July 1.

While Twenty-First Century Fox garnered mostly positive assessments from analysts, coverage on the new News Corp. was initiated with at least two "neutral" ratings and one "outperform" rating.

Lazard Capital Markets started coverage on News Corp. with a "neutral" rating. In a July 1 research report, analyst William Bird noted that the company could face more risk than opportunity, due to pressures on newspapers to turn a profit, potential short interest growth and possible investor dislocation. However, he added that the stock could be a "sleeper" as some opportunities to drive value emerge in the long term.

Wells Fargo started coverage on Twenty-First Century Fox with an "outperform" rating and a price target range of $34 to $36, according totheflyonthewall.com.