There are a couple of “silver linings” for the company, Goldman Sachs’ Drew Borst said in a report. He reiterated a Neutral rating on Disney, while raising the 12-month price target from $108 to $109.
“This was only the second quarter in the past five years that DIS missed consensus EPS,” Borst noted. While operating Income growth was flat in Q4, EPS grew 3 percent year-over-year. Growth was impacted by the disappointing box office performance of Pete’s Dragon and the low growth of 1 percent in Cable Nets due to weak ads.
ESPN ad revenue declined 13 percent in Q4, “reflecting lower Daily Fantasy Sports advertising, the 53rd week comp, and competition from the Olympics,” the analyst wrote, adding that ESPN ad sales were trending lower in Q1 “due to the timing of college football games.”
Borst mentioned a couple of silver linings for Disney:
- Shanghai had four million visitors in four months, and the company expects Shanghai to be breakeven in 2017, a year ahead of estimates.
- Disney plans to repurchase $7-$8 billion in shares in 2017, higher than the Goldman Sachs estimate of $3.2 billion. This increase translates to $0.07, or 1 percent higher EPS.
|Nov 2016||Pivotal Research||Downgrades||Buy||Hold|
|Oct 2016||Credit Suisse||Maintains||Outperform|
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