FuboTV upgraded to Buy following less-than-stellar guidance, Disney lawsuit looms

FuboTV (NYSE:FUBO) was upgraded to Buy from Neutral by Seaport Global despite mildly disappointing guidance on new subscriber growth for 2024.

“Seaport thinks the risk-reward in FUBO shares is attractive from here, suited to investors who can focus on small-caps and who can be nimble in their trading,” the capital markets firm noted.

Seaport also set a new price target of $2.50 on the streaming service.

FuboTV’s fourth quarter earnings results were better than expected when they were released March 1 before markets opened. Shares jumped 17% before settling 8% down “as investors returned focus to a preference for topline and subscriber growth.”

FuboTV expects 380,000 to 385,000 new subscribers for the first quarter 2024 outside of North America. That would represent 1% subscriber growth but a 2% year-over-year decline on revenue. FuboTV also expects a 2% decline in subscribers for the full year.

FuboTV was up 2.6% during premarket trading Monday.

FuboTV CEO David Gandler said during the earnings call the company had filed a class action lawsuit against The Walt Disney Corporation (DIS), Fox Corporation (FOX) and Warner Bros. Discovery (WBD), who are forming a sports streaming joint venture expected to launch in the fall.

“We assert that this JV is an attempt to monopolize the sports streaming industry and eliminate competition,” Gandler said. “Their proposed venture is, we believe just the latest example of the Sports Cartel’s attempt to block and steal Fubo’s vision of what a sports streaming bundle should look like, resulting in billions of dollars in damages to our business.”

FuboTV has HOLD ratings by Seeking Alpha analysts, Wall Street analysts and Seeking Alpha’s quant system.