In a research report issued Friday, Stifel Nicolaus analyst Benjamin Mogil reiterated a Buy rating on shares of Walt Disney Co (NYSE:DIS), with a price target of $130, after the entertainment giant revealed it had lost 3 million ESPN subscribers in a year. Disney shares reacted to the news, dropping 3.56% to $114.45 on heavy volume, dragging down media stocks.
Mogil commented, “After market close on Wednesday, Disney (DIS, $118.67, Buy) released its 10-K filing. ESPN subscriber count was -3.2%, and while this is a Nielsen and not paid subscriber number it is likely somewhat weaker than expectations although we caution the difficulty of extrapolating from a Nielsen number to a paid one. The remaining key Disney domestic channels showed more moderate declines. We continue to see Media performance as the likely focal point of debate on this story, particularly given the limited ability for material cost relief at ESPN given the bulk of their structural costs are license fees, although we note that the company is far more diversified than many of its media peers (in terms of cable exposure) and heads into a very strong studio/CP slate.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Benjamin Mogil has a total average return of 4.6% and a 47.8% success rate. Mogil has a 12.7% average return when recommending DIS, and is ranked #929 out of 3646 analysts.