FOX

ANALYST NOTE: FOX (Fox Corporation) Date: 2026-06-13 Current Price: $46.95

1. Structural Readiness

Conservative Entry: Not yet defined (awaiting confirmed breakout) Aggressive/Pre-Breakout Entry: N/A (Current price is within the forming range) Breakout Level: Not yet defined (Pending confirmation of the structural high that defines the coil top) Current Price: $46.95 Extension: N/A (Price is within the consolidation range, not extended above a breakout) ATR Current: 5.1% (High volatility bucket)

Setup Analysis:

2. Thesis Layer

Thesis Classification: TACTICAL / Setup-Led Secular Thesis: None named at this date.

This is a tactical, setup-led name. There is no named macro or secular thesis driving the conviction at this specific moment. The investment case must be judged strictly on the quality of the technical setup (the forming coil) and the underlying business fundamentals as reported in the most recent earnings and filings. We do not invent a thesis; we weigh the setup quality against the business reality.

3. Business Fundamentals

Company Overview: Fox Corporation operates as a leading global media and entertainment company, structured across three main divisions: Cable Network Programming, Television, and Other/Corporate/Eliminations. The company produces and delivers content through iconic brands including FOX News Media, FOX Sports, Tubi Media Group, FOX Entertainment, and FOX Television Stations.

Business Model & Segments:

• Cable Network Programming: Produces and licenses news and sports content distributed via traditional MVPDs, virtual MVPDs, and digital platforms. Key assets include FOX News, FOX Business, FS1, FS2, and the Big Ten Network.
• Television: Acquires, develops, and distributes programming through the FOX broadcast network, the AVOD service Tubi, 29 full-power broadcast stations (including 11 duopolies), and other digital platforms.
• Other/Corporate: Manages the FOX Studios Lot and other corporate functions.

Key Operational Evidence (as of 2026-05-11):

• Distribution Growth: Distribution revenue grew 3% ($68 million increase), driven by higher average rates per subscriber of approximately $90 million. This was partially offset by a $20 million impact from a lower average number of subscribers.
• Advertising Dynamics: Advertising revenue declined 24% ($480 million) primarily due to the absence of the February 2025 Super Bowl LIX broadcast and lower ratings. However, management noted that *excluding* the Super Bowl impact, advertising revenue grew double digits, driven by strength across the company and continued digital growth.
• Sports Rights: FOX acquired rights to 2 additional NFL games in national windows for the upcoming season. The company holds an 11-year media rights agreement with the NFL (subject to termination after 2029).
• Tubi Performance: Tubi features over 220 creators with 17,000+ episodes. It finished fiscal 2025 with a 2.2% share of all TV viewing (Nielsen's The Gauge). Tubi is being utilized as a simulcast platform for the FIFA World Cup, engaging nearly 100 million monthly active users.
• Cost Management: Operating expenses decreased 16% ($471 million) year-over-year, primarily due to a $535 million reduction in sports programming rights amortization and production costs driven by the absence of the Super Bowl broadcast.
• Forward Outlook: Management expects to deliver record EBITDA for the fiscal year, citing the strength of brands and leadership in live programming.

4. Archetype and Conviction

Archetype: Defensive Operator Rationale: FOX fits the "Defensive Operator" archetype due to its reliance on "appointment-based" programming (sports, news) that remains resilient despite linear viewership declines. The company is actively managing the transition from linear to digital (Tubi, FOX One) while leveraging long-term rights deals (NFL) to stabilize cash flows. The recent cost reductions (16% OpEx decrease) demonstrate operational discipline in the face of cyclical advertising headwinds.

Valuation & Financial Context:

• Forward Consensus EPS: FY1 (2026) is $5.03; FY2 (2027) is $5.76.
• Current Price: $46.95.
• Implied P/E (FY1): ~9.3x.
• Implied P/E (FY2): ~8.1x.

Conviction Stack:

• Thesis Strength: Low (No named macro thesis; purely tactical).
• Evidence Quality: High. Recent earnings (May 2026) provide clear data on distribution growth, digital offset to ad declines, and cost discipline.
• Structural Quality: Moderate. The forming coil suggests accumulation, but the high ATR (5.1%) indicates volatility that could disrupt the structure before a breakout.
• Setup Readiness: Partial. The coil is forming, not confirmed.
• Rerating Potential: Moderate. The market may re-rate the company if the "double-digit ad growth" (excluding Super Bowl) sustains and Tubi monetization accelerates, but the current setup is waiting for price confirmation.

5. Invalidations, Strengths, and Gaps

What Would Invalidate the Case:

• Fundamental: A sustained decline in distribution revenue or a failure of Tubi to maintain its 2.2% viewing share, indicating a loss of the "digital offset" narrative.
• Cyclical: A return of advertising weakness that cannot be explained by the absence of the Super Bowl, suggesting a broader macro downturn in ad spend.

What Would Strengthen the Case:

• Technical: A confirmed breakout above the structural resistance level of the forming coil, accompanied by volume.
• Fundamental: Confirmation that the "double-digit" ad growth (excluding Super Bowl) continues into the fiscal fourth quarter as management stated.
• Strategic: Successful launch and subscriber traction of "FOX One" (expected Fall 2025, now in operation) driving new distribution revenue.

Gaps in Evidence:

• FOX One Metrics: While the launch was expected in Fall 2025, specific subscriber numbers or retention metrics for FOX One as of June 2026 are not detailed in the provided evidence, leaving a gap on the success of the DTC pivot.
• Tubi Monetization: While viewing share is provided, specific ARPU (Average Revenue Per User) or revenue growth rates for Tubi are not quantified in the provided snippets beyond general "digital growth."

PRIVATE ANALYST CALL

Judgment: Speculative Confidence: medium Key evidence: Distribution revenue grew 3% with higher rates; Operating expenses decreased 16% due to lower sports amortization; Management expects record EBITDA for the fiscal year; Tubi holds 2.2% of all TV viewing. Key risks: High current ATR (5.1%) indicates elevated volatility risk; Setup is forming, not confirmed breakout; Advertising revenue declined 24% due to Super Bowl absence; Linear viewership continues to decline industry-wide. Expected path: Management expects continued momentum in ad revenue (excluding Super Bowl) and record EBITDA; structural implication is a potential re-rating if digital growth offsets linear declines. Expected horizon: 3 to 6 months for the forming coil to resolve into a breakout or invalidation.