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