FOX ready to rise by 27%

Entertainment company ready to deliver

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Deutsche Bank analysts have this week upgraded their forecast and 12-month price target for Twenty-First Century Fox (ASX: FOX). Since the June 28 split from News Corporation, Fox has risen modestly from around $32 to Thursday's closing price of nearly $36, and the team at Deutsche Bank estimate the share price could rise to $45 within 12 months. Deutsche believe Fox has the best and fastest growth prospects in the US and rates the stock as the second cheapest in its international sector.

Fox owns a series of broadcast, pay-TV, film, and satellite-TV assets across six continents. Included in that are popular stations such as the Fox News and Sports networks, National Geographic, and of course film production company 20th Century Fox Film.

Deutsche like that Fox has a dominant position in sport in Australia and is introducing a number of new channels in the US to increase market share. The revenue generated from sport broadcasting is expected to offset any seasonal weakness in the film industry and allow the company to continue fighting off competitors such as Netflix (NASDAQ: NFLX) and rival US cable television services.

The analysis also noted that the share price should be well supported by growth investors accumulating positions, continued strength in the US economy and the responsible capital management of Fox's leadership team.

Fox has been a favourite of many analysts since the split from News Corporation, with the diverse assets owned by the business potentially leading to significant growth in the share price. The company recently disposed of its assets in China as it failed to achieve the rights it required broadcast to the majority of the Chinese population, however a recently announced sports deal with IMG-Reliance has given Fox a foothold in the huge Indian market.

Foolish takeaway

Fox's share price has trended steadily higher since listing early this year and bullish analyses from a number of brokers looks set to push the share price higher over the coming 12 months.  There are few large risks in the business model and the entertainment company is attempting to grow its exposure to developing markets to push up earnings. Investors looking for a growing company, but a small dividend payout of just 1%, should consider Fox as a long term buy and hold.

Some investors will be turned off by Fox's low dividend yield. Those investors more should discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

More reading

4 Tech Stocks hitting all time highs

Bigger yields from the big 4?

Is Microsoft a year too late?

Motley Fool writer Andrew Mudie does not own shares in any companies mentioned in this article. 

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »