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Stifel Downgrades Disney, Sees Valuation And Growth As A 'Split Story'

Stifel Downgrades Disney, Sees Valuation And Growth As A 'Split Story' - Walt Disney Company The NYSE:DIS

Stifel’s Benjamin E. Mogil believes Walt Disney Co DIS shares are relatively fully valued at present. He downgraded the rating on the company from Buy to Hold, and kept a price target of $110.

Thoughts On Valuation

“From a valuation and growth perspective, we continue to see the company as somewhat of a split story,” the analyst mentioned.

Mogil believes the Studio and the corresponding Consumer Products businesses continue to deserve a solid multiple to reflect the robust pipeline in the Studio segment.

The analyst stated that this pipeline “no longer justifies an asterisk or a one-off and instead is more reflective of a strong cycle from not just from Marvel and Pixar but increasingly from Disney Animation and Disney live action.”


In addition, the Parks segment is expected to grow as the startup losses associated with Shanghai are reversed, along with the continuing strength in the performance of the domestic Park segment.

“On the other side of the ledger is the Media segment. While there has been some relief/reduced concern around the carriage and MVPD subscriber numbers at ESPN YTD, we estimate that F2017 will be a likely flat year to possibly at Cable OI,” Mogil stated.

The analyst also believes the sports rights license environment continues to favor the right holder, despite MVPD subscriber concerns, with continued inflation expected in this arena.

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Jul 2016Stifel NicolausDowngradesBuyHold
Jul 2016Morgan StanleyMaintainsEqualweight
Jul 2016Brean CapitalInitiates Coverage onHold

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