Brean Capital analyst Alan Gould on Dec. 14 upgraded his rating on 21st Century Fox Inc. shares to "buy" from "hold."

The analyst took the action following the selloff in Fox shares since the company reached an agreement in principle for a possible offer to acquire the remaining shares of European pay TV group Sky plc that Fox does not already own. Gould also likes the prospects of a potential merger between the two companies. The potential deal is accretive to Fox's EPS, Gould added, and it would raise Fox's leverage ratio to 3.6x net debt/EBITDA.

Gould changed his target price on the company to $33.