Roku set to clear regulatory hurdles and close Fox deal, says Wedbush

Roku set to clear regulatory hurdles and close Fox deal, says Wedbush

Roku Inc (NASDAQ:ROKU) remains on track to complete its proposed combination with Fox Corporation in the first half of 2027, according to Wedbush, which reiterated its $155 price target and ‘neutral’ rating after meeting with management.

The broker said it expects the transaction to overcome potential regulatory hurdles and close within the companies’ stated first-half 2027 timeframe.

Roku’s standalone business continues to outperform its previous expectations.

Wedbush raised its standalone estimates for 2026, citing Roku’s new home screen assets, last year’s demand-side platform integrations, a recovery in media and entertainment spending, and higher political advertising supported by improved targeting.

Following the transaction, Wedbush expects Roku to continue operating predominantly as a standalone business, similar to the way Tubi has operated within Fox.

The broker identified potential benefits from combining Roku’s platform and advertising technology with Fox’s content assets, including greater engagement and increased advertising revenue across the combined businesses.

Fox expects $400 million in annualised cost synergies from the transaction, with additional revenue opportunities, and expects the combination to become accretive to free cash flow within two years of closing.

Wedbush believes the $400 million synergy target could prove conservative as Roku’s advertising initiatives develop and Fox brings its upfront advertising opportunities to Roku’s inventory.

The broker also expects Fox to generate additional advertising revenue by combining its content assets with Roku’s advertising technology and platform data.

Wedbush’s $155 price target is based on 16 times enterprise value to EBITD...