Wolfe Research downgraded Fox (NASDAQ:FOXA) from Peer Perform to Underperform, setting a price target of $48, as concerns mount over the company’s long-term growth potential and near-term advertising environment.

Fox has traditionally been seen as better positioned than other legacy media firms, thanks to its focus on live sports and news content and a measured approach to streaming via Tubi. This strategy has helped Fox weather the storm of cord-cutting better than many peers. However, Wolfe now believes the company’s growth avenues in direct-to-consumer (DTC) streaming are limited, especially as larger players dominate the space.

In the near term, advertising revenue is under pressure from a softening macroeconomic backdrop, and Wolfe sees this as an increasing risk to Fox’s financial performance. On a longer horizon, the firm highlights concerns about Fox News’ aging audience demographics and the rising competition in the sports rights space from deep-pocketed streaming giants.

Despite trading at 7.8x estimated 2025 EV/EBITDA, Wolfe argues that the stock does not offer a compelling margin of safety given its exposure to declining linear TV trends and a cloudy outlook for long-term valuation.