Brean Capital Boosts Estimates For Walt Disney Co (DIS); Here’s Why


In a research report released Monday, Brean Capital analyst Alan Gould reiterated a Hold rating on entertainment giant Walt Disney Co (NYSE:DIS), while raising his FY17 and FY18 EPS estimates both by $0.15 to $6.00 and $6.70, respectively. Correspondingly, the analyst is raising his fair value estimate to $108 (from $100).

Gould explained, “Given the projected slower long-term growth rate at ESPN, our longer term EPS growth projection is only 8%, albeit off a record year (and down from the 15% EPS growth rate since CEO Bob Iger took charge). The stock is trading at a slight discount to the market multiple on both our FY17, which faces the large step-up in sports costs and extremely difficult film comparison, and more importantly FY18 estimate, which includes the next major Star Wars film. Also, due to its size and synergy, historically we find when DIS beats the Street, it tends to do so for a number of quarters, and conversely, when it misses as it has in two of the past three quarters, it also tends to also do so for a number of periods.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Alan Gould has a yearly average return of 8.6% and a 84% success rate. Gould has an 25% average return when recommending DIS, and is ranked #550 out of 4240 analysts.

Out of the 32 analysts polled by TipRanks, 15 rate Walt Disney Company stock a Buy, 16 rate the stock a Hold and 1 recommends Sell. With a return potential of 8%, the stock’s consensus target price stands at $108.18.