The news just keeps getting worse for Fox News.

OPINION: This article may contain commentary which reflects the author’s opinion.

Wells Fargo has downgraded Fox Corporation’s stock from Equal Weight to Underweight due to recent developments in Fox News viewership.

The departure of Tucker Carlson in April has notably contributed to a decline in viewership, prompting analyst Steve Cahall to emphasize the “ecosystem risks” associated with Fox News as a significant factor in the decision to downgrade.

“Fox’s earnings are mostly Fox News earnings, and Fox News is facing viewership and share pressures,” Cahall noted. He also highlighted the impact of escalating cord-cutting trends and programming challenges on the network’s performance.

When a stock is rated as “underweight,” it suggests that financial analysts or investors believe the stock should constitute a smaller proportion of a diversified portfolio compared to its current market representation or benchmark index.

The departure of Tucker Carlson has had a notable impact on Fox News’ ratings. Specifically, viewership during this hour has reportedly declined from an average of three million viewers to 1.65 million viewers since Carlson’s departure, Trending Politics News noted.

From January to June, Fox News witnessed a 19% decline in viewership compared to the same period two years ago. The network’s share of cable news primetime viewership, which stood at 52% from 2020 to 2022, dropped significantly to 38% in June 2023 following Carlson’s departure.

Additionally, Fox News’ share of conservative news viewers decreased from 94% to 84%.

Since Carlson’s departure, Fox Corporation’s stock has seen a notable decline, with a drop of up to 5% since April. This decline has resulted in a loss of nearly a billion dollars in market value for the company, the outlet reported.

In addition to the impact of changes in Fox News’ primetime slot, Cahall cautioned about broader challenges within the media industry that could potentially affect Fox’s financial performance.

He highlighted that while television offers better top-line growth when compared to direct-to-consumer channels, there is limited potential for cost reduction, which poses a risk to long-term growth prospects.

Disclaimer: This article may contain commentary which reflects the author’s opinion.