FOX, ROKU Stocks Move Higher — Wolfe Research Sees Upside For Fox In Roku Deal

• Fox said in June it would acquire Roku for $22 billion.
• Wolfe Research sees the deal as a long-term growth driver for Fox that the market is underestimating.
• The market initially reacted negatively, with concerns over Fox paying a premium valuation for Roku, the analyst said.

Shares of Fox Corporation (FOX) and Roku Inc. (ROKU) rose on Wednesday afternoon. The gains came even as Wolfe Research upgraded Fox to ‘Outperform’ from ‘Peer Perform’ and raised its price target to $71, implying an upside of nearly 52% from the stock’s last close. Wolfe Research also said the company’s planned merger with Roku creates a more dynamic growth story than the market is currently pricing in.

At the time of writing, the FOX stock was trading at a gain of 4% while ROKU shares were up 1.7%. 

FOX-ROKU Deal Seen Through Valuation Gap, Analyst Says

In June, Fox said it would acquire Roku for $22 billion, adding a streaming tech platform and a second free, ad-supported service to its portfolio of linear TV networks and Tubi. Peter Supino, analyst at Wolfe Research, told CNBC that markets reacted negatively to Fox’s proposed Roku deal because the acquisition price implied a much higher valuation multiple than Fox itself trades at. 

“Fox offered to pay a price for Roku that was much higher as a multiple of profits than Fox was trading for. There are lots of good reasons for that. We think this is a smart, strategic move for Fox, but the Fox shareholder base signed up for a really different risk profile than Roku,” he said.

Supino said Fox investors have historically viewed the company as a stable media business anchored by Fox News and Fox Sports, but the Roku deal marked a sharp shift in expectations and risk profile.

Supino added that Fox already operates Tubi, “the second biggest player in free ad supported viewing,” positioning the company deeper in the streaming ad ecosystem. He said that Roku brings additional ad inventory and user data, which Fox’s existing ad sales strength could better monetize.

He added that rising streaming subscription costs are pushing more users toward free ad-supported platforms, strengthening the strategic rationale behind the move.

Broader Media Industry Shift

Supino also pointed to broader disruption across media, stating weakness in Fox shares partly tied to uncertainty around NFL broadcast rights renewal costs. He said investors expect higher future costs when deals are renegotiated, though timing and impact remain unclear.

He contrasted Fox’s approach with Comcast’s evolving strategy, suggesting industry players are increasingly reassessing traditional media structures amid ongoing streaming disruption.

ROKU, FOX Stocks: What Stocktwits Retail Sentiment Says

On Stocktwits, retail sentiment for both ROKU and FOX was ‘bearish.’ While message volume for ROKU was ‘extremely low,’ it was ‘normal’ for FOX.

ROKU stock has gained over 26% year-to-date, while FOX shares have fallen over 25% in the same period.

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