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Disney holding 2.6% gains on Iger's ESPN bullishness after miss

Published 11/11/2016, 01:14 PM
Disney holding 2.6% gains on Iger's ESPN bullishness after miss
DIS
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GS
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BARC
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  • Walt Disney (NYSE:DIS) is maintaining gains in the face of yesterday's earnings miss, now up 2.6% as investors digest results dominated by talk of ESPN and a pile of analyst commentary.
  • The stock was substantially down in postmarket trading yesterday but turned up during the company's earnings call. At which point? When CEO Bob Iger expressed bullishness about the subscriber base at troubled ESPN, as Jim Cramer notes.
  • Barclays (LON:BARC) upgraded to Equal Weight after the report, saying ESPN was "de-risked" in the call, while Goldman Sachs (NYSE:GS) boosted its price target (to $109, from $108, implying 12% upside from today's price) and maintained at Neutral.
  • Goldman noted a couple of "silver linings": The Shanghai park logging 4M visitors in four months, along with expectations it will break even a year early; and plans to buy back $7B-$8B in share next year, when Goldman was expecting $3.2B.
  • Stifel Nicolaus (reiterated Hold, price target at $110) sees "a tale of two stories" at the Mouse House. "We continue to be of the view that the consumer-facing segments of the business: theme parks, studio and consumer products, continue to execute well/have a favorable outlook," the firm says.
  • But then there's the Media segment: "While the company did note that media segment subscribers are decreasing at a rate consistent with its past rate, we view this disclosure as somewhat nuanced: The disclosure is company wide across both domestic and international subscribers and that ESPN over the last few years has seen erosion greater than that of the overall company which we view will likely continue."
  • Previously: Disney earnings: ESPN hit by lower ad/affiliate sales, high costs (Nov. 10 2016)
  • Previously: Disney -3.3% on rare earnings miss; TV, products weak (Nov. 10 2016)

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