fuboTV (FUBO) has won a crucial injunction against three of the biggest streaming giants, namely Walt Disney (DIS), Fox News (FOX), and Warner Bros. Discovery (WBD). U.S. District Judge Margaret Garnett granted the ruling in favor of fuboTV and prohibited the trio from launching Venu, their sports-focused virtual multichannel video programming distributor (vMVPD) service. The news pushed FUBO shares by over 42% in mid-day trading on August 19, with analysts giving mixed reactions to the news.
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fuboTV had contested that the proposed joint venture (JV), Venu, would have limited competition in the live broadcasts sports streaming market, thus harming peers and consumers. It argued that Venu would have captured roughly 60%-80% of the market share, presenting a big disadvantage for smaller rivals.
Following the injunction win, fuboTV is determined to go ahead with its antitrust lawsuit against the three streaming giants, citing anti-competitive behavior and a systematic effort to block its business innovations.
Analysts’ Reactions to FUBO’s Injunction Win
Needham analyst Laura Martin said that the temporary injunction implies a “75% chance of killing Venu,” as it will miss the upcoming NFL season. Moreover, the courts may continue to view the JV as monopolistic and rule against it. Martin believes that WBD is the weaker link among the three streaming joints since it will be losing its NBA rights after the 2024-2025 season.
Martin thinks that FUBO is a cheaper way for investors to gain exposure to the fast-growing OTT and streaming networks. The analyst has a Buy rating on FUBO and $2 price target (11.1% upside).
Similarly, Wedbush analyst Michael Pachter noted that the injunction provides FUBO a strategic advantage to maintain its position in the sports streaming market. The court has not given a date for the next hearing, but the injunction does provide a breathing room for FUBO, Pachter added. He also said that FUBO could possibly win the final lawsuit challenging the JV’s anticompetitive impact. Pachter has a Buy rating and $5 price target (Street high target) on FUBO, implying an attractive 177.8% upside potential from current levels.
Unlike Martin and Pachter, Seaport Global analyst David Joyce reacted negatively to the news and downgraded FUBO stock to Hold from Buy. The analyst contended that the recent rise in shares was mainly due to legal headlines and potential appeals and not due to higher subscriber projections or an improvement in other estimates.
Website Traffic Reflects FUBO’s Rising Popularity
According to TipRanks’ Website Traffic tool, the total estimated visits to fuboTV’s website worldwide increased by 150.08% in the year-to-date period compared to last year. The strong website footprint hints at fuboTV’s growing popularity.
Is FUBO a Buy or Sell?
On TipRanks, FUBO stock has a Hold consensus rating based on two Buys, four Holds, and one Sell rating. The average fuboTV price target of $2.81 implies 56.1% upside potential from current levels. Shares have lost 43.4% of their value year-to-date.
